Return to profit for Bradford & Bingley

NATIONALISED lender Bradford & Bingley has returned to profits after seeing a dramatic fall in bad debts.

The rump of the company left behind by nationalisation and swift sale of its branches and savings arm reported pre-tax profits of £896m, reduced to £79.4m when two major one-off receipts are stripped out.

Mortgage cases with more than three months of arrears or requiring repossession fell by 18% in the first half of the year.

However, Bradford & Bingley remains in debt to taxpayers to the tune of £27bn and the company’s results described the timing of repayment of Government loans as “uncertain”.

Managing director Richard Banks said: “I am pleased to announce that we have returned to profit and made great progress against all our financial targets.”

Bradford & Bingley, which was nationalised in 2008, is in the process of being wound up and is expected to be merged with the “bad bank” left behind by Northern Rock to save costs later this year.

The company’s first half profit compares to its £160m loss in the first half of 2009.