However, with its financial advisor, HM Treasury concluded that this option best delivered its objectives of maintaining financial stability, protecting consumers and protecting taxpayers.
Under the Transfer Order, the Financial Services Compensation Scheme (FSCS) has paid out approximately £14bn to enable retail deposits held in Bradford & Bingley and covered by the FSCS to be transferred to Abbey. The Treasury has made a payment to Abbey for retail deposit amounts not covered by the FSCS, amounting to approximately £4bn, to be transferred to Abbey. In return, the FSCS and the Treasury have acquired rights in respects of the proceeds of the wind-down and realisation of the assets of the remaining business of Bradford & Bingley in public ownership.
This follows on from a competive auction process conducted by Morgan Stanley which produced Abbey as the winner. The transfer of the retail deposit book has been backed by cash from HM Treasury and the Financial Services Compensation Scheme.
The remaining assets and liabilities of Bradford & Bingley, principally comprising its mortgage book, personal loan book, headquarters and relevant staff, and treasury assets and its wholesale liabilities, will be taken into public ownership through the transfer to the Treasury of the company's shares.
The Chancellor of the Exchequer confirmed that the Government stands behind the FSCS, so it can be relied on to be able to play its role in meeting future claims that arise.
The share listing of Bradford & Bingley has been cancelled and shareholders will have to wait to learn if they will get any compensation.
