The Bradford & Bingley Bank is based in Bingley, West Yorkshire in the United Kingdom, and was founded in 1964. It originates from the Bradford & Bingley Building Society which itself was created in 1964 through the merger of the Bradford Equitable Building Company, and the Bingley Permanent Society, who were both established in 1851.
Bradford & Bingley Products
Following the demutualization of the Bradford & Bingley Building Society in December 2000, the Bradford and Bingley Bank was created. When the company was floated on the London Stock Exchange, voting members received at least 250 shares (about £500), but those who had greater savings with the Society were able to receive more shares with some members receiving shares worth up to £5000.
The Bradford & Bingley group focused on two main businesses categories, lending and retail. For retailing, they distributed financial products under their brand name and from third parties to their customers. Products could be purchased through a network of retail branches and agencies where personal advice would be provided to customers on which products to buy.
In addition to retail, Bradford & Bingley also provided their own real estate and mortgage products, developing its profile and business in this market with their unique selling point being the variety of products they would provide including buy-to-let and self-certification mortgages that are far more difficult to underwrite.
For a period of time in the early to mid 2000′s the Bradford & Bingley also sold other provider lending products as well as their own, but by 2007 they had reverted to just selling their own products to reinforce their brand.
The B&B Bowler Hat
The Bradford & Bingley bowler hat is instantly recognisable and has been one of the most well-known logos in the UK financial sector for many years. Traditionally the bowler hat was the headgear of choice for city folk and also some well known entertainers. In fact it is understood that Bradford and Bingley actually bought Stan Laurel’s bowler hat in the mid 90’s for a reported £2000.
Global Credit Crisis
It was during the global credit crisis that Bradford & Bingley started to suffer resulting in a record low share price. By September 2008, the company made a statement saying that they would have to make over 350 people redundant, and were also exploring a raft of other measures with the Financial Services Authority (FSA) such as nationalisation or selling off parts of the business.
Ultimately there were few options to save the company’s future, with the final proposal being approved within 24 hours. It was decided to split the bank’s operations with the mortgage business being nationalized, and the deposits and branch network being sold to Abbey National plc a subsidiary of Santander.
Bradford & Bingley and Santander
Santander paid just over £600 million to acquire the Bradford & Bingley Bank and in return transferred about 200 branches, nearly 150 agencies together with their the remaining Bradford & Bingley employees to the Abbey National. The acquisition gave Santander 2.7 million new customers worth in the order of £20 billion.
Many of the former shareholders have become very angry because they haven’t been compensated for their shares that the government now owns. So far, the UK Shareholders Association has received about 300 complaints from these former shareholders. As reported on BBC, these former Bradford & Bingley shareholders should be notified of how much compensation they will receive in June 2010.
The Future of Bradford & Bingley
The future fate of Bradford and Bingley is unknown. Many different newspapers, magazines, have given a variety of opinions, but only time will tell what will happen to the rest of the company.