Not sure if this thread will catch on, because no-one here seems to have much to say about individual british banks, but thought i would add this header to see if we could discuss dividend yields, exposure to sup-prime, good ones, bad ones, take-over targets, when the crisis will end? do you think they have learnt their lesson? I, for one, as a property developer have seen first hand how much stricter they have become with lending habits, struggling to get decent rates for re-mortgaging, basically they appear scared to lend to anyone.

BB. today issued rights issue in spite of the statement below just a month ago.


Bradford & Bingley PLC
14 April 2008

Bradford & Bingley plc

Statement

Contrary to press speculation today, Bradford & Bingley announces that it is not
intending to issue equity capital by way of a rights issue or otherwise.
Bradford & Bingley has a strong capital base, above its regulatory requirements,
and as a result of the Board's conservative approach, has funded its business
activities through 2008 and into 2009. In the current market environment, the
Board will naturally continue to monitor closely the balance sheet strength of
the business and its funding plans.

As previously announced, Bradford & Bingley will release its Interim Management
Statement on 22 April.

82p per share...this is bad news. Trading continues in line with the April trading statement and interim dividend paid in shares?? Looks like BB. has run out of cash.


Bradford & Bingley to raise 300 mln pounds in 16 for 25 rights issue at 82 p/shr - AFX

LONDON (Thomson Financial) - Bradford & Bingley Plc. said it will raise about 300 million pounds, net of expenses, in a 16 for 25 rights issue at an issue price of 82 pence per share.

This represents a 48 percent discount to the closing price of 158.75 pence per share on May 13, the UK mortgage lender said.

It added the proceeds of the rights issue will strengthen the group's capital position and mitigate the impact of the previously announced reductions in the value of some of its treasury investments.

The rights issue has been fully underwritten by Citi and UBS Ltd, Bradford & Bingley said, adding it has also revised its target Tier 1 ratio range to between 8 percent and 10 percent.

The company also said the 2008 interim dividend, due in October, will be paid in shares.

It added trading continues in line with the April trading statement.

"the 2008 interim dividend, due in October, will be paid in shares."

Which means all share holdes end up with the same percentage of the company as they had before - so, what's the point? Why not just cancel the dividend?

Conserves cash for the company,shareholders can sell the divi shares in the market if they need cash.

True hlyeo98 it is bad news but at least we know at which level the underwriters are prepared to underwrite the stock. I expect they have made some strict assessments on future risks. Income funds will not be too pleased either about the dividend situation. Goes to show that not all high yielders are necessarily cheap. Still the rights issue may help draw a line under them and they may be a candidate for take over once it is felt the week housing market has been discounted sp 145p.I am not a holder at present.

Halifax - not issuing shares in lieu conserves cash too - it also saves the cost of issuance. The share price will just be diluted by the percentage of shares issued.

Also what about small shareholders who sell in the interim and end up just holding the dividend shares (maybe just 5 or 10 shares which cost more to sell then they're worth)?

Gus BB's much diminished market capitalisation must make them a prime takeover target for banks prepared to look 2/3 years ahead, just petty cash for say LloydsTsb.

Brian sending out dividend warrants costs money too, when shares go ex dividend the sp usually drops as cash has been paid out.

As regards small shareholders banks paying dividends will no doubt have in place a facility to sell shares on behalf of customers for a nominal sum or free of charge.

Tend to agree, if you wish to conserve cash, just cancel the dividend. Just pay the minimal yearly dividend which will enable the Company to maintain Trustee status. Otherwise you are dividing up the same pie but into smaller pieces. Perhaps paying the dividend in shares means that certain income funds do not have to sell their holdings.

halifax- I am following stock from a take over angle but, against the current housing market background we could see the sp fall further yet in short term.

I agree in the absence of bid talk sp is likely to drift down towards 130p. However their is an opportunity at that level to acquire a bank network very cheaply, who knows even CTT may be a candidate as they are applying for a banking licence and are heavily into sub prime lending!

Re: B&B's divi - Is the stock dividend subject to income tax?

mm. interesting thought.CTT seem mainly to be in personal finance and a merger of the 2 business would diversify the earnings base. I see CTT have been quick off the mark with their rights issue. No dithering there.

brianboru, I believe it is. Regarded as stock dividend and amount of tax based on value of shares issued at the time. Value stated by the Company at the time. Never liked them myself, much prefer to receive cash and makes administration easier for the shareholder.

brianboru, should also say that shares issued normally represent the net equivalent after tax but they have to go in the tax return in case they are taxable at the higher rate. Still worth a check in case this government has slipped some changes in somewhere.

The good news is BB rapidly becoming a penny share with an ex rights sp of around 120p based on current price.

From trades section noticed that someone sold or shorted 39 million RBS shares today, that's quite a few!

I was surprised that lloy didn't take the opportunity to have a rights issue, over the next 6/12 month's there will be plenty of investment situations both in the UK and abroad. If lloy had stated this as the reason for a rights issue, I think the city would have looked on lloy very favourably.

BB. or AL. would be candidates in the UK, but I would think lloy would want to diversify abroad.

lloy is my only holding at present in sector and I did wonder myself weather they would follow suit with a rights issue. Who knows, perhaps they are in the queue. If any acquisition did look favourable they could ask shareholders for funds at the same time. To the surprise of the market lloy and Barc both recently increased their dividends so I wonder if they would have done this if they were thinking of having a rights issue. In the case of Barc, there has been speculation that they may raise futher funds by selling a stake to a sovereign wealth fund.

like you lloy is my only holding in the banking sector, I had a plan to buy into RBS but have changed my mind after reading that Sandy Chen from Panmure Gordon has just slapped a 190p price target on them. He is someone who has made very good calls throughout this credit crunch. It's a hard call now as to which other bank to invest in, still more pain to come I fear.

I certainly wouldn't buy into a bank that was going to pay out future dividends in shares. Doesn't leave alot of choice really, I will top up on more lloy soon hopefully.