B&B flotation starts at bottom end of hopes

Bradford & Bingley, once of the country's largest mutuals and now one of its smallest banks, made its debut on the London Stock Market today with the City valuing it at around £1.73 billion.

Bradford & Bingley, once of the country's largest mutuals and now one of its smallest banks, made its debut on the London Stock Market today with the City valuing it at around £1.73 billion.

The valuation, based on its opening share price of 254p, is at the lower end of the £1.65 billion to £2.2 billion the market had previously forecast.

In early trading the shares fell back to 247p, valuing the B&B at £1.68 billion.

Policyholders who opted to sell their shares immediately will receive payouts of about £620.

An auction of the free shares on Friday through the Initial Share Sale Facility which the B&B provided for policyholders, ended with the shares being sold for an average price of 247.86p.

At 250 shares each, this equated to an average payout of nearly £620, although a minority of members who have both mortgage and savings accounts received 500 shares each - meaning they will receive about £1,240.

It had been hoped policyholders would pick up about £700 each.

Members representing 38.5% of the issued share capital opted to sell their shares and should receive their cheques by December 11.

Friday's auction saw a total of 262.6 million shares sold. A total of 1.05 million B&B members opted to sell immediately.

Analysts said the mortgage banking sector had been under pressure of late, which was why the B&B had floated at the lower end of expectations and the City would now be watching closely to see how its strategy panned out.