Britain to nationalize Bradford ' Bingley

Business Materials 28 September 2008 04:24 (UTC +04:00)

Britain's ailing Bradford & Bingley building society is about to be nationalized, media reports said Saturday, citing sources within London's financial district, dpa reported.

The decision could be announced Sunday evening or Monday morning by the Financial Services Authority (FSA) and the Finance Ministry, the British broadcaster BBC reported.

In order to avert a possible collapse, the country's eighth largest mortgage lender could be merged with Northern Rock, which was itself nationalized earlier in the year when it failed, the Daily Telegraph and Daily Mail reported.

Under one arrangement under discussion, the state would take over obligations of 63 billion euros (92 billion dollars) including risk- ridden mortgages and loans of 52 billion euros, BBC reported. Buyers were being sought for other parts of the bank.

On a visit to the United States, British Prime Minister Gordon Brown said the reports were speculation and he would not comment on them.

Media reports earlier in the week had said that the FSA was seeking a buyer for Bradford & Bingley, the latest victim of the global financial crisis.

The bank posted losses of 26.7 million pounds (49 million dollars) in the first six months of 2008.

Britain's six largest banks hold about a 30 per cent stake in Bradford & Bingley between them, Bloomberg financial news agency reported.