Bradford & Bingley: Question time

Christine Seib

The share price reaction to Bradford & Bingley's two announcements this morning has been equivocal — any upward momentum caused by the appointment of a new chief executive was dampened by the dilution brought by the closure of the £400 million rights issue.

Also, although Richard Pym's appointment is welcome after a three-month search, it raises other questions. First, what now for Rod Kent, B&B's chairman?

The veteran banker will have won little respect for his handling of the banks' numerous attempts to raise extra cash. He has been clear that he has no desire to linger for the long term. Now that the chief executive spot is filled, will the bank be looking at the succession policy for its chairman?

Also, although Mr Pym is a seasoned and steady performer, he cannot get around basic problems with B&B's business. The bank is heavily exposed to buy-to-let in a weakening housing market and, with only a small branch network and relatively low deposit base, is unlikely to attract much interest from acquirers.

There are some big questions awaiting Mr Pym on his first day.

BHP Billiton: Rocky road

David Robertson

BHP Billiton reported profits up 12 per cent to $15.4 billion (£8.25 billion) this morning, its seventh consecutive year of record numbers. But with the prices of many commodities having fallen in recent months amid fears of a global slowdown, it is hard not to feel that this is as good as it gets until the next mining boom

BHP has argued that slower European and North American growth will have little impact on Asia, and China in particular — by far the largest consumer of natural resources.

However, even if that is true, the costs of production for mining companies are rising dramatically (some analysts estimate at over 20 per cent a year) so even a small drop in commodity prices could lead to a profits crunch.

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