Bradford & Bingley, the UK's largest lender to landlords, has said it will sell a 23 per cent stake to TPG for almost £179 million after profit for the first four months of 2008 fell 48 percent.
"Difficult economic conditions have led to a decline in net interest margin and increasing arrears," the Bingley, England- based company said in a Regulatory News Service statement today.
Underlying profit for the four months was £56 million, compared to £108 million in 2007, the bank said.
Bradford & Bingley will raise £42 million less than the £300 million it originally planned in a rights offer to replenish capital.
The reduction follows the agreement to sell the stake to Fort Worth, Texas-based buyout firm TPG. The bank's bad loans are rising as the U.K. housing-market deteriorates.
The stock sale initially gave investors the right to buy 16 shares for every 25 they own at 82 pence apiece, the company said on May 14th.
The bank will now offer 19 shares for every 25 at a price of 55 pence apiece, the statement said.
Bradford & Bingley has fallen 67 percent this year, valuing the bank at £545 million.
In addition to selling a large stake to TPG, Bradford & Bingley has announced that chief executive officer Stephen Crawshaw (47) has resigned to be temporarily replaced by Chairman Rod Kent.