Embattled UK mortgage lender Bradford & Bingley posted a £26.7 million first half pretax loss, hit by investment losses and worsening margins, and said bad debts had continued to rise.
B&B, Britain's largest buy-to-let lender, had posted a pretax profit of £180.4 million a year ago, before it was battered by turbulence in the financial and housing markets.
Excluding a £64.8 millionimpairment charge on its structured portfolio and £27.2 million in losses on the sale of structured investments, underlying pretax profit for the first half of 2008 totalled £70.2 million, the bank said.
B&B's mortgage book has been closely watched by investors and analysts looking for evidence of deteriorating arrears across the sector after years at close to historic lows.
The bank said today that the number of home loans three months or more in arrears worsened to 2.29 per cent from 1.48 per cent at the full year.
In its acquired mortgage book -- which includes loans taken on from finance firm GMAC-RFC and has driven the worsening numbers -- first half arrears jumped to 5.11 per cent.
The bank said it was taking action to improve bad debts, tightening lending criteria and improving its collections process, and said it was also renegotiating a contract with GMAC-RFC that has been blamed for much of the deterioration.
It separately, however, extended a deal with Kensington by 25 months, under which B&B will acquire a total of £1.3 billion of loans by April 2011. Under the previous 2007 deal, the bank had bought £850 million and committed to buying a further £1.15 billion of home loans by March 2009.
Reuters