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| Bradford & Bingley chief resigns | Bradford & Bingley chief resigns |
| (about 6 hours later) | |
| The boss of Bradford & Bingley has quit "due to a serious cardiovascular condition", the firm has announced. | The boss of Bradford & Bingley has quit "due to a serious cardiovascular condition", the firm has announced. |
| Chief executive Stephen Crawshaw is leaving the UK mortgage lender with immediate effect, and will be replaced by chairman Rod Kent in the short term. | |
| Mr Crawshaw's departure comes a day before a trading update and reports say the firm will issue a profit warning. | Mr Crawshaw's departure comes a day before a trading update and reports say the firm will issue a profit warning. |
| The firm has been hit hard by the credit crisis and is trying to raise £300m to boost its balance sheet. | The firm has been hit hard by the credit crisis and is trying to raise £300m to boost its balance sheet. |
| In May, the firm said it would launch a rights issue in an attempt to help offset some of its weakening investment, having only a month earlier denied it would be seeking to raise funds. | In May, the firm said it would launch a rights issue in an attempt to help offset some of its weakening investment, having only a month earlier denied it would be seeking to raise funds. |
| WHAT IS A RIGHTS ISSUE? Companies issue extra shares to raise money They are offered to existing shareholders, usually at a discount to the current share priceShares are offered in proportion to existing holdings, so if you own 10% of the old shares you are offered 10% of the new ones Check Bradford & Bingley sharesCheck other banking shares | WHAT IS A RIGHTS ISSUE? Companies issue extra shares to raise money They are offered to existing shareholders, usually at a discount to the current share priceShares are offered in proportion to existing holdings, so if you own 10% of the old shares you are offered 10% of the new ones Check Bradford & Bingley sharesCheck other banking shares |
| The Sunday Telegraph said Bradford & Bingley was expected to say profits would "fall well below analysts' forecasts" of between £160m and £200m pre-tax. | The Sunday Telegraph said Bradford & Bingley was expected to say profits would "fall well below analysts' forecasts" of between £160m and £200m pre-tax. |
| And the Sunday Times reported the profit warning "is expected to be contained within the bank's rights-issue document" which is to be sent out this week. | And the Sunday Times reported the profit warning "is expected to be contained within the bank's rights-issue document" which is to be sent out this week. |
| US housing slowdown | US housing slowdown |
| B&B saw its profits drop by almost half after writing down assets, including those linked to US mortgages. | B&B saw its profits drop by almost half after writing down assets, including those linked to US mortgages. |
| Pre-tax profit fell to £126m in 2007 from £246.7m the year before. | Pre-tax profit fell to £126m in 2007 from £246.7m the year before. |
| As the UK's biggest buy-to-let lender, B&B has 20% of that market which has suffered following recent market turmoil. | As the UK's biggest buy-to-let lender, B&B has 20% of that market which has suffered following recent market turmoil. |
| Banks worldwide have seen huge losses linked to problems in the struggling US housing market. | Banks worldwide have seen huge losses linked to problems in the struggling US housing market. |
| Problems started when borrowers in the US, with no or limited credit history, started to default in large numbers once interest rates became too high. | Problems started when borrowers in the US, with no or limited credit history, started to default in large numbers once interest rates became too high. |
| Many of those loans to so called sub-prime borrowers had been grouped together, repackaged and sold on to banks as an investment with high returns worldwide. | Many of those loans to so called sub-prime borrowers had been grouped together, repackaged and sold on to banks as an investment with high returns worldwide. |
| B&B, like other banks, has been asking for bigger deposits and raising its interest charges for new products. | B&B, like other banks, has been asking for bigger deposits and raising its interest charges for new products. |
| The firm recently warned of a rise in mortgage arrears as borrowers found it harder to repay loans. | The firm recently warned of a rise in mortgage arrears as borrowers found it harder to repay loans. |
| Competitors have also sought rights issues in an attempt to raise funds. | Competitors have also sought rights issues in an attempt to raise funds. |
| Royal Bank of Scotland is seeking to raise £12bn while HBOS wants to raise £4bn. | Royal Bank of Scotland is seeking to raise £12bn while HBOS wants to raise £4bn. |
| Do you bank with or have a mortgage with Bradford & Bingley? Are you affected by the issues in this story? Send us your comments using the form below. | Do you bank with or have a mortgage with Bradford & Bingley? Are you affected by the issues in this story? Send us your comments using the form below. |