Alliance & Leicester was described as the Volvo of the banking world; safe and unexciting. So who better to be embattled Bradford & Bingley’s new boss than former A&L FD and CEO Richard Pym?

Pym has cut his retirement short by announcing a return to executive management, effectively ending the search for a replacement for Steven Crawshaw.

What's happened…

B&B has been a much publicized casualty of the enduring credit crunch, with some reports suggesting the market value of the company has fallen by as much as 85% in the past 12 months.

According to Mike Trippitt, analyst at Oriel Securities, the second half of last year wasn’t as poor operationally for B&B as many had predicted, and instead, it was the first half of 2008 which dealt the toughest blow.

‘It was a combination of credit write-downs and arrears picking up and the need for capital raising and the departing CEO,’ he said.

The £400m rights issue launched in May has been plagued by problems with retail and institutional investors taking up only about 20% of the available shares.

The remaining B&B stock will be taken up by UBS and Citigroup, as well as several sub-underwriters.

What's next…

Now that the capital raising has been finalised and mortgage arrears are picking up, Pym’s arrival heralds a pivotal time in the history of the lender. There appears to be two schools of thought dictating B&B’s short-term profitability: Is it a bad business or is it simply a good business in a bad time?

Trippitt leans to the latter and believes it’s simply a good business model experiencing the impacts of taxing market conditions.

‘It’s a good business at a bad time. It’s a specialist lender with a good market share. There’s a lot of experience,’ he said.

Despite history proving otherwise, Pym’s appointment has fuelled speculation B&B could be being groomed for a potential takeover.

In his previous role at A&L, he rejected an acquisition offer by Credit Agricole which, according to Trippitt, was a poor business decision.

‘He sent them packing when the price was right. Hindsight is a grave thing… he didn’t sell A&L when he should have,’ he said.

Pym’s mandate will be looking to ensure provisioning is adequate and necessary risk systems are in place.

‘His appointment is good news for B&B,’ Trippitt said.