Bradford & Bingley Independent Valuer.
I have now issued my Revised Assessment Notice. It upholds my determination that no compensation is payable by HM Treasury under the Bradford & Bingley plc Compensation Scheme to former shareholders or holders of subscription rights.
You can read the notice by clicking on the downloads link on the top right of the page. In it I explain how and why I have chosen to uphold my initial decision having taken into consideration the arguments put forward to me in response to my 5 July 2010 Assessment Notice.
Together, my Assessment Notice and my Revised Assessment Notice provide my answers to the following questions, which were previously included in this Frequently Asked Questions page:
- Why doesn't the share price on 26 September 2008 - immediately before the Transfer Order - form the basis of value for compensation?
- What basis have you used to determine the value?
- Bradford & Bingley had one of the strongest capital positions out of all the UK banks. How can it have suffered severe solvency problems?
- Why would the Board file for administration?
- Why did the Bank of England deny access to further funds?
- Why wasn't Bradford & Bingley sold or merged with another company prior to transfer?
- If the branch network and retail deposit business of Bradford & Bingley was transferred to Abbey (now Santander) for a financial consideration, why wasn't this distributed among shareholders?
- If Bradford and Bingley had gone into administration, what value would that have delivered for shareholders?
I have removed the following FAQ from this section of the website as it is now out of date:
- Why has it taken you a year to reach a nil value consideration?
Assessment Q&As
Noteholders
Revised Assessment Notice
Next Steps
Information to and from us
Assessment Q&As
1. What compensation is owed to former shareholders of Bradford & Bingley?
In my Assessment Notice of 5 July 2010 I set out my reasons for having determined that no compensation is payable by HM Treasury under the Bradford & Bingley plc Compensation Scheme to former shareholders or people who hold subscription rights to shares. I then reviewed this assessment, taking into consideration the arguments put forward to me between 5 July and 27 August 2010. On 14 March 2011 I issued my Revised Assessment Notice. This upholds my initial determination that no compensation is payable by HM Treasury under the Bradford & Bingley plc Compensation Scheme to former shareholders or people who hold subscription rights to shares.
2. How have you arrived at this decision?
Since my appointment as Independent Valuer I have met with many parties to gather perspectives and information that might be relevant to my determination. These parties have included the current and former executives of Bradford & Bingley; the Government authorities responsible for the supervision of banks and the financial system; and advisers to these executives and the authorities. I have also been contacted by many individuals and groups who have asked me to reconsider my Assessment Notice of 5 July 2010. I have considered those requests put to me between 5 July and 27 August 2010 and sought to address them through my Revised Assessment Notice.
3. Why was Bradford & Bingley transferred into public ownership?
It is not part of my role to respond to this question.
4. What happened to my shares when Bradford & Bingley was transferred?
The ownership of the company was transferred to HM Treasury and is therefore owned by the UK Government.
My role as Independent Valuer has been to establish what amount, if anything, HM Treasury should pay by way of compensation under the Bradford & Bingley plc Compensation Scheme.
5. If Bradford & Bingley shares had been allowed to continue trading, wouldn't they have recovered value?
In my Assessment Notice I concluded that Bradford & Bingley would not have been able to continue as a going concern, there would have been a suspension in the trading of its shares and it would have applied to Court for an administration order.
6. What about capital?
The bank had suffered losses on its portfolio of investments. These losses reduced the bank's capital strength from January to June 2008. Bradford & Bingley launched a rights issue in July 2008, raising £401m to offset its losses and successfully restore its capital strength. In my Revised Assessment Notice I respond to submissions in relation to the capital strength of Bradford & Bingley.
7. What happened to the funds raised from the rights issue in July 2008?
The capital raised through the rights issue was used to restore Bradford & Bingley's capital strength measures. The funds themselves were managed within treasury operations of Bradford & Bingley.
8. (Formerly FAQ 14 as referred to in my Revised Assessment Notice) Why did RBS and HBOS receive emergency assistance from the Bank of England and not Bradford & Bingley?
According to the Bank of England, it is a core principle that when the central bank gives its assistance, it must only be done where absolutely necessary and it should always be a bridge to a solution of the underlying problem of the bank.
For both RBS and HBOS, short term liquidity measures allowed them to bridge through to the Government recapitalisation scheme and the merger with LloydsTSB respectively. In Bradford & Bingley's case, no such longer term measure was available, except to enact the Transfer order.
9. Did Abbey (now Santander) pay a fair price for B&B's branch network and retail deposit business?
The Transfer of B&B's branch network and retail deposit business to Abbey was made as a result of a competitive process to which major UK and international financial institutions were invited. Abbey tendered the winning bid.
10. What is insolvency?
Insolvency is a lack of financial resources, such that a business is unable to meet its ongoing commitments. When insolvent, an administrator is appointed by the Courts to manage the company's affairs, business and property for the benefit of its creditors (the people or other businesses to whom it owes money).
The objective of an administrator is: to rescue the company so that it can continue to operate; to achieve a better price for the company's assets or otherwise realise value more favourably than if the company were wound up; or to realise the value of property to make a distribution to one or more preferential creditors.
Noteholders
11. What determination have you reached with regards dated subordinated noteholders?
I have issued a separate Assessment Notice in respect of extinguished rights relating to dated subordinated notes. A copy is available here to view or download. I did not receive any requests for reconsideration of this Assessment Notice and so I have not issued a Revised Assessment Notice in respect of extinguished rights relating to dated subordinated notes.
12. I am a PIBS holder. What is being done to address my situation?
On 8 June 2010, I wrote to holders of PIBS instruments addressing this question. A copy is available here to view or download.
Revised Assessment Notice
13. Why did it take so long to publish the Revised Assessment Notice?
I was keenly aware of the need to provide as swift a resolution as possible to the question of what, if any, compensation was payable by HM Treasury under the Bradford & Bingley plc Compensation Scheme. However I also needed to ensure that the entire assessment process was carried out thoroughly and robustly. This required that I complete a careful review of all of the requests put forward to me by former shareholders.
14. Your Revised Assessment Notice doesn't answer the request I wrote to you about.
My Revised Assessment Notice answers the requests and arguments that fell within my role as Independent Valuer as set out under the Bradford & Bingley Compensation Scheme Order 2008. As I explain in Section 10 of the Revised Assessment Notice, it was not within my remit to comment on all of the requests and arguments I received during this time.
Next steps
15. What happens next?
If you are dissatisfied with the determination in my Revised Assessment Notice you may refer the matter to the Upper Tribunal (Tax and Chancery Chamber). Any such reference must be made using Form FTC3. Form FTC3 must be completed and signed by or on behalf of the person making the reference. It must be received by the Upper Tribunal no later than 28 days after notice was given of the determination in my Revised Assessment Notice. At the same time a copy of the completed and signed Form FTC3 should be sent to me at: PricewaterhouseCoopers LLP, 1 Embankment Place, London WC2N 6RH.
For a copy of Form FTC3 and important information about how to complete it, please go to the Upper Tribunal website: www.tribunals.gov.uk/financeandtax/FormsGuidance.htm
The London address of the Upper Tribunal (Tax and Chancery Chamber) is:
The Upper Tribunal
Tax and Chancery Chamber
45 Bedford Square
WC1B 3DN
The telephone numbers of the Upper Tribunal are +44 (0)20 7612 9646 and +44 (0)20 7612 9647.
16. What can I do if I still disagree with your revised findings?
If you are someone who is affected by and dissatisfied with the determination made in the Revised Assessment Notice you may refer the matter to the Upper Tribunal (Tax and Chancery). See the answer to the above question for details.
17. Can I expect to receive any interest or dividends from my shares this year?
No, HM Treasury owns all the shares.
18. I would like to transfer, move or cash in my shares. How can I do this?
The ownership of all shares in Bradford & Bingley was transferred to HM Treasury in September 2008. This means HM Treasury is the sole owner of shares in Bradford & Bingley.
If you have any administrative queries about your former shareholding, you can write to Computershare, who hold Bradford & Bingley's share register, at:
Computershare Investor Services plc
PO Box 1913
The Pavilions
Bridgwater Road
Bristol
BS99 2PR
If you have any other queries about your shareholding, you can contact Computershare by email: www.investorcentre.co.uk/contactus or by telephone: +44 (0) 844 472 6003.
19. Can I set this loss against capital gains tax?
Please note that I am unable to provide you with tax advice. According to HM Revenue and Customs: "If you own shares that become worthless, or almost worthless, you might be able to make what's known as a 'Negligible Value Claim', ie a claim that the value is negligible (almost nil).
You should refer to the HMRC website for more information.
20. What action is Leon Kaye taking?
It is my understanding that Leon Kaye, a law firm, is considering whether there is a supportable claim against Bradford & Bingley that is not covered by my mandate. Leon Kaye has not been appointed to assess any compensation payable by Government as a result of the Transfer Order and their process is completely separate from the one I am engaged in.
Information to and from us
21. Will we receive any more information from you?
I will not be issuing or responding to any further correspondence in relation to my Assessment Notices or Revised Assessment Notice other than in the course of any proceedings before the Upper Tribunal.
22. Will you reply specifically to my letter?
I hope you will understand that I could not respond individually to former shareholders' letters or queries or to questions outside my remit, nor will I be responding to any further correspondence in relation to my assessment, other than in the course of any proceedings before the Upper Tribunal.
23. Who can I speak to if I have questions?
If your question is about the process by which Bradford & Bingley was transferred or I was appointed then this is a matter for HM Treasury.
If you are dissatisfied with the determination in my Revised Assessment Notice you may refer the matter to the Upper Tribunal (Tax and Chancery Chamber). Any such reference must be made using Form FTC3. Form FTC3 must be completed and signed by or on behalf of the person making the reference. It must be received by the Upper Tribunal no later than 28 days after notice was given of the determination in my Revised Assessment Notice. At the same time a copy of the completed and signed Form FTC3 should be sent to me at:
PricewaterhouseCoopers LLP,
1 Embankment Place,
London WC2N 6RH.
For a copy of Form FTC3 and important information about how to complete it, please go to: www.tribunals.gov.uk/financeandtax/FormsGuidance.htm
The London address of the Upper Tribunal (Tax and Chancery Chamber) is:
The Upper Tribunal
Tax and Chancery Chamber
45 Bedford Square
WC1B 3DN
The telephone numbers of the Upper Tribunal are +44 (0)20 7612 9646 and +44 (0)20 7612 9647.
If you have any other queries about your shareholding, you can contact Computershare by email: www.investorcentre.co.uk/contactus or by telephone: +44 (0) 844 472 6003.
24. Can I get a large print copy of the Assessment Notice or Revised Assessment Notice?
Click here to view, download or print a large print copy of the Assessment Notice.
Click here to view, download or print a large print copy of the Revised Assessment Notice.