Two European financial institutions -- mortgage lender Bradford & Bingley and Dutch-Belgian bank Fortis -- seem near to either being sold or being nationalized by the government, according to various media reports Sunday.
According to reports in The Wall Street Journal and the BBC, British financial authorities are in the process of nationalizing Bradford & Bingley after the global liquidity problems basically froze the bank’s ability to do business.
A plan for B&B is expected to be announced at 8 a.m. British time Monday before the London Stock Exchange opens, which according to the BBC, will contain some sort of nationalization plan.
British Treasury Minister Yvette Cooper told the BBC that deposits at B&B would be guaranteed by the U.K. government, but stopped short of saying the bank would be nationalized.
B&B, which provides loans to landlords to build rental properties, saw its stock price fall 28% in the past week alone.
If B&B is nationalized, it would be the second time in the past year that British authorities have had to intervene directly in the U.K.’s financial sector. In February, the U.K. government nationalized Northern Rock after the mortgage lender could not find a buyer for the bulk of its assets.
A spokeswoman for B&Bsaid the firm would not comment until the Treasury announces its plan for action.
On the other side of the English Channel, the struggling Dutch-Belgian bank Fortis may be broken up and sold, with banks ING or BNP Paribas being possible buyers, The Wall Street Journal reported Sunday.
Another possibility for Fortis is the sale of some of its more non-performing assets, the Journal said -- perhaps with the help from Dutch and/or Belgian government authorities.
Like many financial firms in the past few weeks, Fortis has suffered from a crisis of confidence among investors. The bank replaced its chief executive on Friday and has tried to reassure investors that it isn’t suffering from liquidity issues.
A spokesperson for Fortis was not immediately available for comment.
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