B&B shuts 68 branches

Newly floated bank Bradford & Bingley is to close 57 estate agencies and 11 former building society branches, following a slide in income from property services.

In its first results statement since converting from a building society, the Bradford & Bingley (B&B) has announced the closure of 68 outlets, and the integration of further branches, in an effort to "control administration costs".

The move will cost 300 jobs, said the bank, which includes the Black Horse Estate Agency chain among a current portfolio of about 600 outlets.

Income from estate agency operations, hit by an 8% fall in completed home sales and "downward pressure on commission rates", fell 8.5% to £107.2m last year, Wednesday's results briefing revealed.

The firm also swallowed £70m charge to pay for its conversion from a mutually-owned building society to a bank listed in December on the London Stock Exchange.

But pre-tax profits overall surged 25% to a record £231m during the year.

Tactical switch

Chief executive Christopher Rodrigues said the earnings rise reflected a tactical switch away from the traditional mortgage business, where competition is becoming increasingly tight, into broader financial services.

The Halifax bank and Nationwide Building Society last week announced low-price mortgage packages, stocking a battle for business, and sending the price of bank shares tumbling on fears of lower earnings.

But by turning High Street branches into independent financial advisers (IFAs), B&B hopes to cash in on sales commissions, which are currently a less volatile source of income than the margins on mortgage lending.

"Despite the demands of the conversion process, we put in place many of the building blocks needed to support our evolution from a mutual manufacturer of lending and savings products into a... distributor of a wide range of financial services," Mr Rodrigues said.

In the City, shares in B&B stood 4p lower at 291p at 0950 GMT.