Charcol sold as B&B aims to cut costs

Bradford & Bingley, the mortgage lender specialising in buy to let properties, has sold its Charcol mortgage broking business and said cost-cutting will mean its profits for the year will be near to £279m, not including large exceptional costs.

The firm sold Charcol to a consortium including Advantage Capital for an undisclosed sum. It will re-employ the founders of the business, John Garfield and Charles Wishart, who left in 1998 - two years before the business was sold to the mortgage bank for £100m.

B&B said that it had kept its income at a higher than expected level while slashing costs by cutting hundreds of jobs and selling off its estate agency businesses.

The firm will write off £140m associated with these businesses and Charcol. The cost cutting will cost it £40m, B&B said.

It has cut back on telephone calls, computers and outside consultants, according to chief executive Steven Crawshaw. "We have literally had a purge on every single cost line," he said, while adding, "we haven't squeezed the customer facing staff in the branches".

B&B said that the level of arrears on its mortgages was "extremely low", despite the slowing housing market.