A US private equity group has bought a stake in Bradford & Bingley
A US private equity group has bought a stake in Bradford & Bingley following a profits warning from the UK mortgage lender.
However, news of the purchase of 23 per cent of Bradford & Bingley by Texas Pacific Group (TPG) failed to prevent the bank's share's tumbling by almost 30 per cent.
The company will pay £179 million for the stake, the bank said. It is also raising funds from a £258 million rights issue, with all shares now at 55p, down from the 82p original rights issue price.
During the first quarter of the year, the Bradford & Bingley said that it had made pre-tax losses of £8 million, compared to pre-tax profits of £107 million in the same period of 2007.
The number of people in more than three months' arrears on their mortgages has risen to 2.16 per cent from 1.63 per cent in the last four months, the bank said, and this is expected to continue.
Chairman Rod Kent said that the trading update was "disappointing", adding: "I understand shareholders' disappointment."
It has also been revealed that Bradford & Bingley's chief executive Steven Crawshaw is stepping down with immediate effect because of "a serious cardiovascular condition". A successor is being sought, with Mr Kent taking the role of executive chairman until an appointment is made.
