British banks reassure investors

29 November 2007

Bradford & Bingley has tried to reassure investors by announcing it is on track to meet profit forecasts and has enough funding.

Alliance & Leicester also announced that it was staying well afloat, which caused shares in the bank to rise by 11 per cent.

"We have taken the view that we should take our funding when we can and we got in some early funding deals when the windows were open, so we are padded up for the long haul," chief executive of Bradford & Bingley, Steven Cranshaw, said, adding that its funding would see it "through to the back end of next year".

Meanwhile Alliance & Leicester said that it had maintained growth despite "unprecedented conditions" in the banking industry.

BBC business editor Robert Peston said that Alliance and Leicester and Bradford and Bingley were "the banks perceived by regulators and markets as most vulnerable to a hysteria-induced run caused by the debacle at Northern Rock in mid September".

"In extraordinarily challenging conditions in credit markets, they have succeeded in securing requisite funds from commercial sources," he added.

Analysts had feared that the two banks would struggle to secure funding after interbank lending has been curbed by the credit crunch.

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