Mortgage lender Bradford & Bingley fears of profit warning

Mortgage lender Bradford & Bingley have been talking of fears of profit warning, they will be updating the city later this week on their current trading, one issue that they will talk about is their prospectus for a £400m fundraising.

The prospectus will show their figures for underwriting fees along with the fees that they had to pay to Goldman Sachs, B&B’s financial adviser. Over the weekend there was speculation that Goldman might be paid a separate fee, once they had completed their funding package.

Since the announcement, Goldman has declined to comment about the fees, they did say “We are advisers to B&B.” Callum McCarthy, the FSA chairman has said that they are closely monitoring B&B; this is a result of their shares dropping.

Bradford & Bingley’s shares finished the week 50 pence down, the lender has now hit a low of 48p, this is below their rights issue price of 55p.

Four of the largest shareholders of B&B who together own 13 percent of the company have stepped in to back the rights issue on Thursday; this was when TPG withdrew its proposed offer of a £179m cash injection.

Source