Bradford & Bingley feeling the heat

BRADFORD & Bingley has warned it has yet to see any upturn in its struggling independent financial adviser (IFA) arm despite the recent stock market rally.

The former building society said it was reviewing costs in its IFA business, which runs the MarketPlace and Charcol brands, as it battles subdued demand for savings products.

Investment sales in the distribution arm plunged 36% in the six months to 30 June. Chief executive Christopher Rodrigues said people were simply choosing not to save. 'People haven't quite made the connection between what they need to save for the retirement they want and what they have saved already,' he said.

B&B blamed the fragile stock market and lower property sales last month, when it warned that first-half profits would come in below last year's £135m. Today's figures showed underlying pre-tax profits for the six months to 30 June were £132.4m, in line with the City's revised forecasts.

Estate agency revenues tumbled 16% in the first half to £35.2m as first-time buyers deserted the market. Rodrigues said there had been an 'uptick' recently.

Total new lending over the six months was up £2.4bn to £4.6bn on the back of stronger commercial lending and the acquisition of two mortgage books from GMAC - a subsidiary of General Motors. B&B's 1.2m small shareholders will get an interim dividend of 5.5p, up 12.2%.