U-turn at B&B puts Charcol on the market

Bradford & Bingley is to sell off its 322-branch estate agency and seek a buyer for its mortgage broker Charcol in an extraordinary U-turn just weeks after the departure of chief executive Chris Rodrigues.

The former building society paid £170m for Charcol and the estate agencies but yesterday admitted they had failed to produce sufficient profit.

New chief executive Steven Crawshaw, who took over from Mr Rodrigues 10 weeks ago, said: "It was fairly clear that businesses which employ around half our staff generate basically no returns. I wish it was more sophisticated than that but it isn't."

B&B's shares jumped 6%, the third-best performing stock in the FTSE 100 yesterday, helping to counter a long period of underperformance. Analysts welcomed savings of £40m a year and speculated that the bank is being "cleaned up" for a potential sale.

B&B will focus on specialised lending such as buy-to-let and self-certification mortgages, where it has enjoyed 70% sales growth over the past year. But Mr Crawshaw rejected suggestions that the new strategy will leave it overexposed to the high-risk end of the property market. "If there is mispriced risk for banks in the retail market at the moment it is in personal loans at 5.9%, it's not in specialised mortgage lending."

B&B shocked the mortgage market when it paid £100m for Charcol and became the first bank to shelve its own mainstream loan products in favour of those from other lenders with the introduction of its Market Place concept.

But yesterday it junked full-scale brokerage in favour of a slimmed-down service in which it will offer the mortgage products of a handful of other providers. "We have been dealing with 100 suppliers and all the operational plumbing that entails. In future we'll only have to deal with 10 suppliers."

Goldman Sachs will handle the sale of Charcol and the estate agencies.

Mr Crawshaw said it was too early to speculate about the price it might achieve or any job losses.