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Axe hangs over Bradford and Bingley staff in Yorkshire
HUNDREDS of jobs are at risk at Bradford & Bingley's head office in Yorkshire as the troubled lender embarks on a second swathe of job cuts following the news yesterday that it will sack 300 staff in Hertfordshire.
Loss-making B&B said the second stage of a review will involve the 1,400 staff employed at the group's head office in Bingley and other staff in Crossflatts.
Sources said that would lead to several hundred job losses and B&B confirmed there would be a "further reduction in staff numbers". B&B said it was too early to say how many jobs would be lost.
B&B said the job cuts would cut annual expenses by 15m, but they will generate one-off costs of 14m. In a damning sign of the times, the lender said 70 jobs would be created in Bingley to help collect bad debts.
Meanwhile, mixed messages were coming from the US over the fate of President George Bush's emergency meeting to solve the economic crisis.
The president has said a $700bn (380bn) rescue plan needs to be agreed "immediately" if the United States is to avoid a "financial panic" and a "long and painful recession".
But Senator Richard Shelby said outside the White House that he did not believe there was an agreement and that the proposals by US Treasury Secretary Hank Paulson constituted a "bad plan".
White House counsel to Mr Bush Ed Gillespie said that those in the meeting had "no doubt" that the US needed to act and described it as a "good meeting". Asked if a deal was close, he said: "We're getting close."
Gordon Brown said last night that he will divert from a United Nations convention in New York to meet George Bush in Washington today to discuss the worsening global economy. The move comes amid more economic gloom, both at home and abroad. Ireland officially fell into recession with new figures showing that the country's once-aggressive economy contracted by one per cent in the first six months of the year. Three major lenders lifted mortgage rates – HSBC, Barclays's lending arm, the Woolwich, and Yorkshire-based internet bank First Direct.
Bradford & Bingley is keen to streamline itself following a disastrous year. The group reported a near 27m first-half loss, and the Financial Services Authority is working behind the scenes to persuade rival banks to take over B&B and put it out of its misery.
But City analysts warned that no-one wants to buy B&B's high-risk mortgage book. Jonathan Pierce, at Credit Suisse, said: "We doubt any major bank will want exposure to a 40bn mortgage portfolio with arrears almost double the industry, and where over 40 per cent of loans will be in negative equity if house prices fall by 30 per cent."
He said that would lead to three other options for B&B – going it alone, which he said was increasingly untenable; direct regulatory intervention; or a managed acquisition by other institutions.
Last night Conservative MP for Shipley Philip Davies, whose constituency includes the lender's head office, said: "About 2,000 of my constituents are employed by Bradford & Bingley.
"But any job losses are not just devastating for them but for the whole community."
"Anything B&B want me to do on their behalf, including lobbying the Government and the Bank of England, I will be very happy to do."
Chief executive of regional development agency Yorkshire Forward Tom Riordan said he had spoken to B&B and was not aware of any further impending job cuts in the region.
"Efficiencies are being made all over the sector. If there are to be any job losses in Yorkshire we'd be straight in there and talking to them about it."
B&B's shares closed down 15 per cent, a fall of 3.75p to 21.25p, signifying that the market has little hope of a rescue deal.
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Sunday 12 February 2012
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