‘Former shareholders must benefit from bad bank sale’

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PRESSURE is growing for nearly one million small shareholders who were wiped out in the controversial nationalisation of Bradford & Bingley to be given free shares if the holding company returns to the private sector.

Philip Davies MP, who has been pressing for a public inquiry into the circumstances surrounding the collapse of the lender, said the creation of a challenger bank could secure hundreds of jobs in Yorkshire and provide compensation for those who lost their savings.

UK Asset Resolution was set up in 2010 to wind down the closed mortgage books of failed lenders Bradford & Bingley and Northern Rock.

The Bingley-based company has since repaid £8.3bn of Government funding and last month reported underlying profits of £856m in the first three quarters of 2013, up 15 per cent on the same period last year.

In an interview with the Yorkshire Post, Erica Swales, operations director, said that the end game for UKAR is “ultimately… to pay back the money we borrowed”.

She added: “How we do that, there’s a number of ways to skin a cat. As it stands at the moment, we are winding down the book and doing it successfully. It’s quite profitable and we have paid back £8.3bn in the last three years.

“The end game could be a number of things. There is an aspiration that potentially it could be sold back into the private sector.

“But I think that’s something we are working through with UKFI.”

UK Financial Investments manages the Treasury’s shareholdings in recapitalised banks. A spokeswoman for UKFI declined to comment.

Ms Swales said UKAR employs people with “significant expertise”. She added: “It’s a bit like from the ashes, success has been born. You talk about the zombie bank, and the bad bank, but we have some great results here.”

The company is headquartered at Crossflatts and has two sites in Sunderland. It employs around 2,400 people between Yorkshire and the North East.

Philip Davies, the Conservative MP for Shipley, has called on ministers to look at whether a modern-day bank could be born from UKAR, arguing that it would bring much-needed competition to the banking sector and protect 1,200 jobs in his constituency.

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