Former B&B shareholders denied compensation
by Gill Montia
Story link: Former B&B shareholders denied compensation
Around 935,000 former shareholders of Bradford & Bingley (B&B) are to be denied compensation.
The lender came close to collapse in September 2008 when it was bailed out with an £18.4 billion injection of taxpayer cash.
The firm had been hit by bad loans and arrears on its buy-to-let business, through which it offered high loan-to-value ratios.
B&B was almost immediately split into a “good” and “bad” bank with its £41 billion mortgage book taken into public ownership and Santander acquiring its retail deposit book and branch network.
Independent valuer, Peter Clokey, has now recommended that the Treasury offer no compensation to shareholders, arguing that had B&B been placed in administration, shareholders would have been left empty handed.
The B&B Shareholders Action Group plans to appeal against the decision.