Bradford & Bingley CEO steps down

The chief executive of Bradford & Bingley quit on Sunday and the embattled lender announced plans for an unscheduled trading update, less than a month after surprising investors with an emergency cash call.

Monday's statement from the country's largest buy-to-let mortgage lender is likely to warn on 2008 profits, rekindling concerns about short-term prospects for the bank and the wider mortgage market, amid rising arrears and bad debts.

It could also include news of a cash injection from U.S. private equity firm Texas Pacific, the BBC reported.

Quoting no sources, the BBC said late on Sunday that the U.S. investment firm would invest 150 million pounds in the mortgage bank to back existing plans for a 300 million pound rights issue, which could be trimmed.

The bank declined to comment on the detail of Monday's trading update or on the report of Texas Pacific's cash boost.

"We can confirm that, due to a serious cardiovascular condition, Steven Crawshaw is stepping down as chief executive with immediate effect," the bank said in a statement on Sunday.

Crawshaw, who joined the lender almost a decade ago ahead of its flotation, had been under pressure since B&B announced its bumper rights issue in May to bolster its balance sheet - a month after saying it had no plans to do so.

B&B said at the time it had waited for markets to stabilise before going ahead with the deeply discounted issue, but its shares have since tumbled over 40 percent.

Chairman Rod Kent will temporarily take over executive control of Britain's biggest buy-to-let lender, B&B said.

PROFIT WARNING?

The bank confirmed on Sunday it will update the market on its current trading early on Monday, but declined to comment on newspaper reports it would also warn on its profit outlook.

The Sunday Telegraph and the Sunday Times said the bank will warn that full-year pretax profit could come in below the current analyst range of 160 million pounds to 200 million. That would already be as little as half last year's 352 million.

B&B said in its last update in April that buy-to-let demand remained strong, despite turbulence in the property sector. Strong rental demand may underpin buy-to-let as many potential homebuyers are still priced out of the market.

But B&B, which like rival Northern Rock came to rely heavily on wholesale funding, has felt the impact of the credit crunch on margins, despite an increased focus on deposits.

Crawshaw, who had been unwell for some time, will leave the bank nine years after he joined from Lloyds TSB Group to lead the flotation of the former building society in 2000. He became chief executive in March 2004.

He is also chairman of the Council of Mortgage Lenders..

Bradford & Bingley's shares hit a record closing low of 88-1/2p on Friday, valuing the bank at 546 million pounds - a fraction of its 3.3 billion value at its March 2006 peak.

Fresh turbulence at the bank will send jitters through the market as larger rivals Royal Bank of Scotland and HBOS press ahead with their own discounted rights issues.

With B&B's shares down over 44 percent since the cash call was announced and trading close to its rights issue price of 82p, speculation over its future as an independent bank is also set to return.

Like fellow mortgage lender Alliance & Leicester, B&B has been a long-time takeover target, though it is unclear whether a larger bank would choose to increase exposure to the mortgage market with house prices set to tumble further..