Brussels, 25/01/2010 (Agence Europe) - The European Commission approved UK government measures granted for the liquidation of Bradford & Bingley on Monday 25 January. Following close cooperation with the British authorities, this decision, along with that on the Dunfermline Building Society (see related article), brought the chapter of British bank restructuring to a close, Jonathan Todd, spokesman for Competition Commissioner Neelie Kroes, told press. In a press releases, Kroes said that “the UK authorities' market-oriented solution has avoided any disproportionate distortions of competition while enabling the preservation of the viable parts of the business”.
By September 2008, Bradford & Bingley had fallen into severe difficulty. The UK authorities decided to nationalise and wind down the bank while it was still solvent, sell its retail deposit book and branches to Abbey National and provide the remaining part of the business with a working capital facility and guarantee arrangements. These measures were authorised by the Commission on condition that the UK submitted a restructuring plan or a plan for liquidation for the bank. London decided to go for the second option. The liquidation plan submitted by the UK provides for a prolongation of the rescue measures previously authorised, which are now extended for the liquidation of the bank, and a potential capital injection.
The Commission concluded that the liquidation plan ensures “an orderly winding down of Bradford & Bingley in a manner which maintains financial stability”. The liquidation period covers more that 10 years. However, “once the bank is no longer active in the market, competitive distortions are limited,” the Commission says, noting, too, that the wind-down can be accelerated by a sale of the remaining assets when market conditions improve.
Bradford & Bingley is no longer active on the market. However, the Commission accepted that in order to facilitate the orderly wind-down of its portfolio, it will continue offering limited services to its existing clients. In the same vein, Bradford & Bingley will relinquish or limit any regulatory permission that is not required for the orderly wind-down of the business. The Commission will strictly monitor the progress of the wind-down process and its impact on competition. (O.L./transl.rt)