Britain Plans To Take Over Biggest Lender

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The New York Sun

Bradford & Bingley Plc, Britain’s biggest lender to landlords, may be taken over by another bank or nationalized today under a British government-backed plan to protect $39 billion of customer deposits.

The chancellor of the Exchequer, Alistair Darling, will announce details of the plan before 8 a.m. today, his office said late yesterday. Treasury officials worked through the night on a partial government takeover, acquisition by a rival bank or a break-up and purchase of assets by several buyers.

“The government is stepping in,” the chief secretary to the Treasury, Yvette Cooper, said yesterday in an interview with the British Broadcasting Corp. “Depositors and ordinary savers must be properly protected, and they will be as part of the arrangements we’ll set out.”

Banco Santander SA, Spain’s biggest bank, is likely to buy Bradford & Bingley’s retail deposits, a person familiar with the situation said. The Santander, Spain-based bank is also likely to take on Bradford & Bingley’s branch network, the person, who declined to be identified because the discussions aren’t yet public, said late yesterday.

Bradford & Bingley is the third major British bank to run into trouble since credit markets seized up last year around the world. Its shares have fallen 93% this year. Northern Rock Plc was nationalized in February, and HBOS Plc sold itself to Lloyds TSB Group Plc on September 18.

Regulators in America seized Washington Mutual Inc., the country’s biggest failed bank, and sold its assets and branches on September 26 to New York-based JPMorgan Chase & Co.

Talk of another government-led bank bailout in Britain reopened a rift between the nation’s political parties, with the Conservatives charging that Prime Minister Brown has held up regulatory reform and Labour ministers saying the opposition is playing politics.

“We’ve got a regulatory system set up by our prime minister that seems to have completely failed to spot that something was wrong, to get something done about it, and we’ve got a bunch of politicians running the country who’ve had a year to pass this legislation, which we’ve said repeatedly we will support,” a conservative leader, David Cameron, told the BBC from his party’s conference in Birmingham, England.


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