B&B shares hit record low

Shares in beleaguered mortgage lender Bradford & Bingley (BB-) hit a record low on Thursday after the group unveiled details of further cost-cutting plans.

The FTSE 250 group saw its shares plunge 11% to 22.25p after cutting 370 jobs and closing its Borehamwood processing centre

to save £15 million a year.

The group also announced further writedowns as it sold off its remaining toxic assets to "minimise the risk on its balance sheet". Its structured finance portfolio is now worth £494 million from £747 million at the end of June.

Additionally, the group has disposed of £40 million of asset-backed securities from its liquidity portfolio. However, it is hiring new staff for its arrears department to chase payments from an increasing number of customers who have fallen behind with their mortgage repayments.

The struggling group, which gets most of its funding from the wholesale markets, has come under intense pressure in recent times. This week, its credit score was slashed by the big three ratings agencies to one notch above junk status.

Richard Pym, the new chief executive who was brought in last month to revive the ailing bank, said: "The changes we have announced today focus the business as a strong savings bank, reduce the size of our lending activities, and increase our capacity in arrears collection.

"We are a strongly capitalised bank now undertaking a complex transition with regrettable job losses, but we are planning to put the problems of the past behind us and have a business which is fit for purpose going forward."

In June, the lender raised £400 million through an emergency rights issue and posted losses of almost £27 million for the first-half of the year. Its shares have lost 92% of their value over the last year.

The Financial Services Authority has become increasingly concerned over the financial welfare of the group in recent weeks and was reportedly trying to broker a rescue deal with the likes of Abbey owner Santander or the Dutch savings bank ING.

The iBall TV team took a look at Bradford & Bingley this week. Watch the episode.