Shareholder Executive
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Board Members 2008-09
Chair
Richard Pym
Executives
Chris Willford
Group Finance Director
Roger Hattam
Group Operations Director
Non-Executives
Louise Patten
Michael Buckley
Since 31 December 2008, Chris Willford and Roger Hattam have stepped down from the
Board, effective from 30 June 2009. Richard Banks was appointed Managing Director
on 27 April 2009, and Richard Pym became Non-Executive Chair on 1 July 2009.
Shareholder Executive role
Advisory role, attend Board meetings in the capacity of an observer.
Bradford and Bingley
Purpose
Following the transfer of Bradford & Bingley to public ownership, it was required to cease new lending activities. Other than honouring outstanding mortgage commitments, the business was transformed from a mortgage lending and deposit taking bank into a mortgage servicing bank and is being wound down.
Legal status and ownership
Bradford & Bingley is now a Government owned bank, regulated by the Financial Services
Authority. The Treasury Solicitor holds 100% of the share capital of the business.
Government’s objectives
The Government’s main objectives in relation to Bradford and Bingley are to maintain financial stability and protect the taxpayer.
Bradford & Bingley’s objectives are to repay HM Treasury and the Financial Services Compensation Scheme (FSCS) as soon as market conditions allow, and to protect taxpayers, whilst also treating customers and creditors fairly.
In order to achieve this, Bradford & Bingley will pursue the following strategic priorities:
- run down the balance sheet
- minimise impairment and losses
- restructure and re-align the business
- provide transitional services to Abbey, which acquired the UK deposit business and branch network of Bradford & Bingley.
A business plan that describes how Bradford & Bingley intends to achieve the above objectives has been submitted to the European Commission in order to obtain State Aid approval.
The Shareholder Executive is advising HM Treasury in its ongoing work with Bradford & Bingley to optimise future strategic plans to maximise value for money for the UK taxpayer.The Shareholder Executive provides close support to HM Treasury in monitoring the progress of Bradford & Bingley against its objectives.
Financial Performance1
| £m | 2008 | 2007 | 2006 |
|---|---|---|---|
| Turnover2 | 801 | 629 | 602 |
| Profit/(Loss) before tax | 134 | 126 | 247 |
| Profit/(Loss) for the year | 18 | 93 | 178 |
| Net Cash flow | (141) | 688 | (61) |
| Shareholders' Funds | 1,158 | 1,211 | 1,420 |
| Dividends | 88 | 127 | 119 |
Dividend policy
Having disposed of the retail network of Bradford & Bingley to Abbey National, the mortgage book of Bradford & Bingley is being wound down in order to repay HM Treasury and the FSCS, and any surplus cash will be used to accelerate this. It is therefore unlikely that any dividend will be paid in the near to medium term.
Performance targets
Bradford & Bingley’s over-arching objectives are to repay HM Treasury and FSCS as soon as market conditions allow, and to protect taxpayers, whilst also treating customers and creditors fairly.These objectives are driven by a number of performance targets including mortgage redemptions, profit and loss performance, use of working capital facility and loan impairment charges.
Notes
1 Bradford & Bingley’s year end is 31 December.
2 Net interest income plus fee and commission income.
Commentary
On 29 September 2008, Bradford & Bingley plc was taken into public ownership by way of a Transfer Order (The Bradford & Bingley plc Transfer of Securities and Property etc. Order 2008), which effected the transfer to HM Treasury of all of the bank’s shares.
The Transfer Order also effected the transfer to Abbey National plc of Bradford & Bingley’s UK deposit business and branch network and the shares in its Isle of Man subsidiary for a consideration of £612m.
The retail deposits transferred to Abbey were matched (less the consideration of £612m) by a cash asset paid to Abbey by HM Treasury and the FSCS of approximately £4bn and £14bn respectively.The retail deposits transferred to Abbey were replaced with a Statutory Debt totalling £18.4bn owed to the FSCS and HM Treasury. In addition to its share of the Statutory Debt, HM Treasury put in place guarantee arrangements in respect of certain wholesale borrowings and derivative transactions with the bank existing at the time of the transfer, and a working capital facility.
At the point of transfer, Bradford & Bingley held total assets of £52.5bn, including loans and advances to customers of £42.2bn, of which £41.3bn were residential mortgages and £0.9bn were commercial and housing association property loans.The bank also held £7.9bn of wholesale assets.