B&B's provisions for losses soar

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The Independent Online
PROVISIONS against losses at Bradford & Bingley Building Society, the seventh-largest in the country, nearly tripled last year.

The society saw pre-tax profits drop by 15.3 per cent, from pounds 107.8m to pounds 91.3m, after taking the loss provisions into account. It made provisions of pounds 81m against pounds 30.4m for 1991, bringing total provisions against future losses to pounds 102.5m.

Geoffrey Lister, chief executive, said 1992 was 'probably the toughest year for building societies since the war'. Arrears levels remained high. Cases 12 months or more behind with payments rose from 3,198 to 5,900. Properties taken into repossession were 38 per cent down on the previous year.

Bradford & Bingley claimed to be the first society to set up a mortgage-to-rent rescue scheme in association with two housing associations.

The society cut its costs from 47.1p to 44.7p per pounds 1 of income. Two regional centres, in Hampshire and Middlesex, were closed.

Operating profits increased 24.7 per cent to pounds 172.3m while the capital base was strengthened through the issue of pounds 50m of permanent interest-bearing shares.

John Wriglesworth, building society analyst with Phillips & Drew, said B&B could feel quite satisfied with the figures, which are about average for this year. 'It was a credible performance considering they took on the Leamington Spa's horrendous book.'