Bradford & Bingley in drive for Swinton

Bradford & Bingley, the former building society, is planning to make a move into selling motor insurance and is in talks to buy the Swinton chain of high-street brokers for around £100m.

Swinton is currently owned by MMA, a French mutual insurer which bought the business from Royal & SunAlliance two years ago for £54m. RSA had owned the business for only four years and was forced to write off nearly £100m as a result of the sale.

Under its high-profile chief executive, Christopher Rodrigues, Bradford & Bingley has diversified from its traditional business as a mortgage lender and deposit taker.

It bought the John Charcoal independent financial advice chain shortly before Bradford & Bingley floated in 2000, adding to the IFA business earlier this year though the purchase of Holden Meehan, a deal that meant the company had to give up its protection from hostile takeover.

But City analysts have questioned the wisdom of the group's expansion in this area, especially since profits in the distribution business, as Bradford & Bingley calls it, fell from nearly £15m in the first half of last year to just £1m in the first half of this year.

Mr Rodrigues believes that by offering motor insurance, the company can add another profitable line of business that it sells though its MarketPlace brand. It also believes it could sell financial products through the Swinton stores.

But this strategy is not without its dangers. Many companies have lost money in motor insurance as it is difficult for the high-street brokers to compete with the telephone and online services, such as Direct Line and Esure. Also, many insurance companies have tried to cut out the brokers by selling directly.

Bradford & Bingley has long been seen as a takeover target by the City. Barclays was said to be in talks to buy the company last year, but nothing came of them.