Bradford & Bingleys main business activities are: LENDING providing a wide range of loans secured on property, focussed on specialist segments of the residential and other markets. RETAIL which sells a wide choice of financial products through its branches and direct channels, including our own savings products.

            Red = 25 day moving average.           Green = 200 day moving average.

Bradford & Bingley PLC
03 November 2006

Mortgage Portfolio Acquisition


Bradford & Bingley plc is pleased to announce that it has today purchased a
mortgage loan portfolio from Kensington Mortgage Company Ltd for a consideration
of around 210 million.

This latest loan portfolio acquisition will increase the Bradford & Bingley
Group's total assets, which stood at 43.4 billion on 30 June 2006, by around
0.5%.

24 November 2006

Bradford & Bingley completes acquisition of 670 million loan portfolio from GMAC-RFC


Bradford & Bingley plc is pleased to announce that it has today purchased a mortgage
loan portfolio from GMAC-RFC for a consideration of around 670 million.

The purchase, funded from Bradford & Bingley's existing resources, has been made by
Mortgage Express, its wholly owned subsidiary.

This latest loan portfolio acquisition will increase the Bradford & Bingley Group's total
assets, which stood at 43.4 billion on 30 June 2006, by around 1.5%.

All lending in the portfolio is secured on UK residential property and in addition to
reviewing the credit controls GMAC-RFC employed in originating the loan portfolio,
Bradford & Bingley has tested the loan book using its own credit scoring process to
confirm that it meets the Group's credit standards.

It's all about opinions.

February 14, 2007 The Times

Bradford & Bingleys bet on buy-to-let home loans is hard to call

Quite what Mr Bradford and Mr Bingley would make of yesterdays full-year numbers from the 3 billion mortgage lender they used to promote is difficult to tell.

The bowler-hatted duo, a fixture of 1990s TV advertising, epitomised a breed of old-style building society manager that might feel ill at ease in the racier public company that B&B has become in its seven years since flotation.

Gone is the estate agency business and mortgage broking operation. Instead, B&B has reinvented itself as a slimmed-down specialist lender. Underwriting standard mortgages has dwindled to 25 per cent of the transactions it handles, their place taken by higher-margin buy-to-let and self-certified home loans.

In that sense, yesterdays results gave the clearest account yet of the achievement of Steve Crawshaw after three years of restructuring under his watch. Pretax profits were up 8 per cent, slightly ahead of forecasts, costs rose more slowly than revenues and the total dividend is up 9 per cent. Indeed, with B&B reporting a strong start to 2007, and much-feared new entrants having failed to dent its margins to date, forecasts for this years first-half profits would seem unlikely to fall.

However, it is not the short term but the medium that worries bears of B&B. An investment in B&B is effectively a bet that growth in specialist mortgages will continue to outstrip that of their standard counterparts. The reasons frequently cited by the bank why this should be the case immigration, a rising student population and a demographic shift to smaller households are undoubtedly persuasive. And B&Bs assertion that buy-to-let mortgages have the potential to take 30 per cent of the total market does not seem too fanciful.

But the simple fact remains that buy-to-let loans and their like were not around at the time of the last serious downturn in the housing market, leaving investors without a precedent to gauge how B&B might fare if turbulence ensues. And while such products may be more established in the United States, deep differences in the housing market make comparisons meaningless.

So aside from the beneficial effects of Basle II, the regulatory capital accord from which B&B stands to free up 300 million of capital, shareholders might want to hang their hats on hopes of a bid. While much of last years bid premium has leached out of the shares, it persists nonetheless.

B&B has a strong brand, a strong market position and is easily digestible, but its size and a lack of potential cost savings would argue against its status as takeover target. At 464p, the shares trade at 11.4 times 2007 earnings, a premium to the 10.5 times of its peers which mean they remain a hold.

As 58pc of B+B's 31.1bn portfolio is invested with professional landlords, the following can only be helpful:



U.K. Demand to Rent Homes Rises at Fastest Pace in Nine Years

By Brian Swint

Feb. 28 (Bloomberg) -- Demand to rent homes in the U.K. rose in the fourth quarter at the fastest pace in nine years, the Royal Institution of Chartered Surveyors said.

A balance of 30 percent of surveyors reported tenant lettings increased in the last three months of the year, the highest since the survey began in 1998, the institution said today in London. Demand for houses outpaced apartments, with the balance reaching 34 percent, the highest since 1999.

``Tenant demand will continue to rise as long as economic conditions remain strong,'' said Jeremy Leaf, a spokesman at the institution, in a statement. ``The rental market will remain a property purgatory for many would-be buyers unless accessibility and affordability conditions improve significantly.''

The fastest economic growth in two years in 2006 created a record number of jobs in the U.K., attracting a wave of immigrant workers from Eastern Europe and spurring demand for housing. House prices rose about 10 percent last year and the number of first-time buyers fell to a 26-year low, according the HBOS Plc, the country's biggest mortgage lender.

Property advertised by new landlords, a gauge of buy-to-let investment activity, had an index reading of 10, indicating that more surveyors saw an increase in advertisements than a decline.

FT.com - March 13 2007
By Ben White and Michael Mackenzie in New York and Eoin Callan in Washington


Fears of subprime fallout escalate


Trading was halted in New Century Financial on Monday with the second-largest US subprime lender teetering on the edge of bankruptcy, sparking fresh fears about whether turmoil in the sector could spread and damp US economic growth.

The halt, ordered by the New York Stock Exchange, came after New Century said its banks had either cut off credit or signalled their intention to do so, increasing the likelihood of an imminent bankruptcy filing or asset liquidation.

The rapid decline of New Century, the latest problem at US subprime lenders, raised concerns that problems could spread in the $8,000bn mortgage industry and to other parts of the capital markets.

Reaction in the markets was muted. US government bonds rallied as investors shifted cash into the safety of Treasuries. Stocks edged slightly higher, though shares in other subprime lenders continued to fall.

Shares in Countrywide Financial, the fourth-largest US subprime lender, fell almost 3 per cent to $35.14 after the company said foreclosures hit a five-year high of 0.70 per cent in February and that turmoil in the subprime market could hurt earnings.

Market participants were also braced for the possibility that if New Century collapsed it could lead to broad investigations into practices across the subprime lending market.

Some economists also fear that the collapse in subprime loans could trigger wider house price falls.

In a filing with the Securities and Exchange Commission on Monday, New Century said lenders including Bank of America, Barclays, Citigroup, Credit Suisse, Goldman Sachs and Morgan Stanley had issued letters saying the company was in default.

New Century also said its bankers had demanded that it accelerate its obligation to buy back outstanding mortgage loans financed under the lending arrangements.

New Century said if its bankers demanded accelerated repurchase of all outstanding mortgages, it would cost the company $8.4bn, which it does not have.

That could lead the lenders to force a liquidation of New Centurys mortgage portfolio. New Century said such a liquidation might not generate enough capital to meet the banks demands.

Disclosure of the default letters on Monday came after Morgan Stanley last week agreed to extend $265m in fresh financing to New Century and take over a $710m credit facility from Citigroup.

In its disclosure, New Century said it had a $2.5bn repurchase obligation to Morgan Stanley. The company added that one of its lenders has said it may be willing to continue providing limited financing under its existing agreements but that such financing might be eliminated at any time.

........starting to look like the bubble is bursting. take another read of this one.




The Questor column
Edited by James Quinn
14/02/2007

Time to move out of B&B as ceiling gets too close for comfort

Bradford & Bingley
Questor says Sell

There was no clearer sign that the dotcom boom was past its peak than when cabbies started routinely offering share tips to pass the time. Running with the herd only lasts so long.

The same could be said of the buy-to-let market, which has been expanding at 20pc to 30pc annually and has grown out of nothing to account for 24pc of the private rented sector in just 10 years. Now that rental yields are compressing and interest rates rising, its attractions are rapidly diminishing.

A bursting of the buy-to-let bubble would see Bradford & Bingley shares deflate faster than a balloon. Some 58pc of its 31.1bn portfolio is tied up with professional landlords, delivering 26pc growth in new mortgages last year. The company is spreading its risk away from buy-to-let into equally "specialist" self certification mortgages to the self-employed, which registered growth of 74pc last year, but the exposure is still a worry. Few dispute that if the housing market does slow, buy-to-let is where it will be felt first.

That extra risk, though, has brought greater profits. Chief executive Steven Crawshaw makes a convincing case for a sustainable future, at least until rates rise to 7.25pc, he claims. There is no sign of house prices slipping and high employment is keeping rental levels ticking up nicely.

The extra 12bn to 15bn of mortgage-writing capability the new Basel II rules on capital reserves promises further, unfettered growth, and as long as buyers believe property is the best investment for their pension, demand will remain. It is a strong argument, but one founded in optimism. Competitors have entered the specialist mortgage market in droves recently, shaving B&B's net interest margin to 1.19pc from 1.21pc last year as full year profits fell 6.4pc to 247m before tax after a one-off 89.4m charge.

The shares, down 2 to 464p, trade on 11.2 times earnings with a 4.6pc yield. There is always the prospect of a bid with B&B and, in the short term, there is further growth to be had in buy-to-let. But the ceiling is getting ever closer and with the bump likely to be sudden, take this chance to sell.