Britain's Big Banking Boys Belatedly Bailout Beleagured Buy-to-let Bradford & Bingley
I've been saving up all my B's, in a kind of Buy one Get ten B's Free sort of a deal. A bit like B&B shares I suppose....
(Mailonline) -- Britain's Big Six banks staged a dramatic rescue of Bradford & Bingley last night in a bid to avert a new Northern Rock crisis.
Under pressure from the financial services regulator, they agreed to buy a large chunk of shares in the beleaguered bank.
The bail-out followed a £400million rights issue by the former building society which was sunk when its shares plunged further during a day of bloodletting on the stock market. Up to £36billion was wiped off the value of Britain's biggest listed companies amid fears of recession.
Bradford & Bingley shares, which have fallen by nearly 90 per cent over the past year, have now dropped to a level where shareholders will refuse to buy any more.
They were described as worthless by one analyst yesterday and the rights issue was described as 'a dog's breakfast'. Existing shareholders had been offered the chance to buy at a 'discounted' 55p.
But the price nosedived a further 19 per cent to a record low of 34p yesterday, following a fall of 16 per cent on Monday.
It is understood the six banks, HBOS, Abbey, Barclays, Lloyds TSB, Royal Bank of Scotland and HSBC, stepped in after being leaned on by the Financial Services Authority.
They have promised to buy the shares which Bradford & Bingley's main underwriters, the American investment banks UBS and Citigroup, do not buy, a procedure known as ' subunderwriting'.
As a result, the high street banks will end up owning at least 30 per cent of their rival.
One banking source said: 'It is in everyone's interest that there is confidence in the market.'
(Mailonline) -- Britain's Big Six banks staged a dramatic rescue of Bradford & Bingley last night in a bid to avert a new Northern Rock crisis.
Under pressure from the financial services regulator, they agreed to buy a large chunk of shares in the beleaguered bank.
The bail-out followed a £400million rights issue by the former building society which was sunk when its shares plunged further during a day of bloodletting on the stock market. Up to £36billion was wiped off the value of Britain's biggest listed companies amid fears of recession.
Bradford & Bingley shares, which have fallen by nearly 90 per cent over the past year, have now dropped to a level where shareholders will refuse to buy any more.
They were described as worthless by one analyst yesterday and the rights issue was described as 'a dog's breakfast'. Existing shareholders had been offered the chance to buy at a 'discounted' 55p.
But the price nosedived a further 19 per cent to a record low of 34p yesterday, following a fall of 16 per cent on Monday.
It is understood the six banks, HBOS, Abbey, Barclays, Lloyds TSB, Royal Bank of Scotland and HSBC, stepped in after being leaned on by the Financial Services Authority.
They have promised to buy the shares which Bradford & Bingley's main underwriters, the American investment banks UBS and Citigroup, do not buy, a procedure known as ' subunderwriting'.
As a result, the high street banks will end up owning at least 30 per cent of their rival.
One banking source said: 'It is in everyone's interest that there is confidence in the market.'
