Bradford & Bingley cuts hundreds of jobs in shake-up

BRADFORD & Bingley announced it is to cut 370 jobs as it attempts to streamline its operations after a disastrous year which has seen the bank post losses of more than £26m.

In a statement the company – Britain’s biggest buy-to-let lender – said it is to close its mortgage processing centre in Borehamwood, Hertfordshire, reduce its intermediary sales team and make all its branch based mortgage advisors redundant.

The cuts – expected to save £15m a year – will see 300 hundred jobs go at the Hertfordshire office, and 50 branch mortgage advisors will be made redundant alongside 20 sales staff.

Existing activities at the company’s mortgage processing centre in Borehamwood will transfer to the its larger operations centre in Bingley, West Yorkshire.

The company said it anticipated that the workload from the Borehamwood site will be absorbed within the current staff at its central Bingley locations.

The Herfordshire site is expected to close in the first quarter of 2009.

Last month the company revealed first half losses of £26.7m and said bad debts continued to rise.

The embattled bank, which recently completed a twice revised £400m rights issue, made the losses in the six months to June 30 compared to a pre-tax profit of £180.4m in the same period a year ago and said it remained “cautious” as turbulence continues in the financial and housing markets.

The company said it has no plans to reduce the number of branches, and will be expanding the arrears function by around 70 positions to increase collections capacity.

However more job losses could follow as the company confirmed it was reviewing its head office support functions to reduce its costs to a level that is “sustainable in the long term.”

Upon the announcement, Bradford & Bingley’s shares slipped 7% to 23.25p.

Chief executive Richard Pym said: “The changes we have announced today focus the business as a strong savings bank, reduce the size of our lending activities, and increase our capacity in arrears collection.

“We are a strongly capitalised bank now undertaking a complex transition with regrettable job losses, but we are planning to put the problems of the past behind us and have a business which is fit for purpose going forward.”

Bradford & Bingley also said that since June 30, it had disposed of a number of assets within its structured finance portfolio.

Various securities have been sold or written down to zero which Bradford & Bingley said had reduced the value of its structured finance portfolio from £747m at June 30 to £494m. 

Additionally, the company has disposed of £40m of asset-backed securities held within its liquidity portfolio.