I would close any account with Bradford & Bingley at this point:
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/04/13/cnbanks113.xml Gordon Brown to meet banks in summit over mortgage crisis
Britain's most senior banking executives will meet Gordon Brown for crucial talks in Downing Street this week as one of the country's biggest mortgage lenders prepares to tap shareholders for hundreds of millions of pounds in fresh capital.
Bosses at Nationwide and Britain's largest high-street lenders will hold a summit meeting with Brown and Alistair Darling, the Chancellor, on Tuesday morning to discuss new ways of halting the paralysis in the mortgage market.
As the banks prepare to convene at No 10, The Sunday Telegraph has learned that Bradford & Bingley, Britain's biggest buy-to-let lender, is plotting a rights issue to try to bolster its ailing balance sheet.
People close to B&B said last night that Citigroup has been asked to assist with a capital-raising that could occur before the bank's annual meeting on April 22. The decision to press ahead with the rights issue has not yet been formally taken by B&B's board and its possible extent has also yet to be decided. It is thought likely, however, that it would attempt to raise several hundred million pounds.
B&B's talks about raising new capital will provide a gloomy backdrop to the Downing Street meeting, which will be attended by executives including John Varley, the chief executive of Barclays; Sir Fred Goodwin, of Royal Bank of Scotland; Graham Beale, boss of Nationwide; Andy Hornby, chief executive of HBOS; and representatives from HSBC, Abbey and Lloyds TSB.
The talks will focus on the state of the housing and interbank borrowing markets and a potential "kitemarking" solution that would help to identify the highest-grade mortgages for money-market investors. They are also likely to discuss the mandate of Sir James Crosby, the former chief executive of HBOS, who was last week given a brief by the Government to promote ways of addressing the funding shortage in the mortgage market.
Crosby is expected to report back in June, and some lenders are understood to be concerned that his findings will not be able to be implemented with sufficient speed to assist hundreds of thousands of homeowners who need to secure immediate borrowing packages.
B&B has faced punishing conditions as
the mortgage-lending environment has deteriorated, and has significantly scaled back its operations in recent months. Moody's Investors Service, the rating agency, downgraded B&B's long-term ratings last month to reflect a deterioration in the bank's asset quality, a weaker capital position after asset writedowns and the probability of slower business growth. So far this year, B&B's share price has fallen by more than 35 per cent. On Friday the stock closed at 167.3p.
Steven Crawshaw, chief executive of B&B, warned last week that mortgage-lending in Britain could halve this year unless the Bank of England acts to pump more money into the financial system.
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