All shares in Bradford & Bingley were transferred to HM Treasury at 8am on 29 September 2008. HM Treasury is required by legislation to set up a scheme for determining the amount of any compensation payable to persons who held Bradford & Bingley plc shares immediately before they were transferred into public ownership and an announcement in this regard will be made by HM Treasury in due course.

On 3 December 2008, the Treasury laid before Parliament for approval a draft Order which includes the details of the compensation scheme for determining the amount of any compensation payable to persons who held Bradford & Bingley shares immediately before they were transferred into public ownership.

The scheme proposed provides for the Treasury to appoint an independent valuer who will set his own procedures for valuing the amount of any compensation payable. In conducting his valuation, he will be required by legislation to assume that at the time that Bradford & Bingley was taken into public ownership public support had been withdrawn and no further public support would be provided.

The draft Order will be debated by Parliament later this month.

Further information:

Draft Compensation Scheme Order

Explanatory Notes

The transfer of the shares of Bradford & Bingley plc into public ownership took place in accordance with the Banking (Special Provisions) Act 2008. That Act allows HM Treasury to take such action (without consultation with shareholders, if necessary) where it appears to HM Treasury that it is desirable to do so in order to maintain the stability of the UK financial system and there would be a serious threat to that stability if it did not do so.

The transfer to Abbey National plc of the retail deposit business of Bradford & Bingley (along with its branch network) was also undertaken in accordance with the Act, following a competitive sale process.

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Your mortgage remains in place on the terms agreed with Bradford & Bingley plc. You continue to owe the same amounts to Bradford & Bingley plc under your mortgage as you did before, and so you should continue to make payments to Bradford & Bingley plc in the usual way.

Amounts due on the mortgage under direct debit standing orders will be paid from your usual account to Bradford & Bingley plc.

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The detail set out below is for information purposes only. Bradford & Bingley plc is unable to give legal or other advice regarding the current or future position of investors.

In the first instance, please refer to the HM Treasury website for further information on the Guarantee Arrangements (put in place by HM Treasury to safeguard certain wholesale borrowings and derivative transactions of and wholesale deposits with Bradford & Bingley plc existing as at midnight on 28 September 2008) at:

http://www.hm-treasury.gov.uk/press_98_08.htm

http://www.hm-treasury.gov.uk/bradford_bingley_assets_transfer.htm

Subordinated Bonds

• Subordinated or other hybrid capital instruments are not covered by the Guarantee Arrangements. This includes:
  • Perpetual Subordinated Bonds;
  • Perpetual Preferred Securities; and
  • Dated and Undated subordinated bonds issued under Bradford & Bingley’s Euro Medium Term Note Programme.

Amendments to Undated or Perpetual Subordinated Bonds and Perpetual Preferred Securities:

These are as follows:

The terms of Bradford & Bingley plc’s obligations in respect of these bonds have not been amended by the Bradford & Bingley plc Transfer of Securities and Property etc. Order 2008 or otherwise.

These bonds still exist. However, Bradford & Bingley plc is unable to give legal or other advice regarding the current or future position of investors in relation to these bonds and Bradford & Bingley plc would suggest that you obtain advice from your own advisers (for example, legal, tax, stock-broking and so forth).

Amendments to Dated Subordinated Bonds:

These are as follows:

The terms of these Bonds have been amended as per the Bradford & Bingley plc Transfer of Securities and Property etc. Order 2008 and bondholders have been notified and an RNS has been issued by Bradford & Bingley plc on 10 October 2008. Otherwise, the terms of Bradford & Bingley plc’s obligations in respect of these bonds have not been altered.

These bonds still exist. However, Bradford & Bingley plc is unable to give legal or other advice regarding the current or future position of investors in relation to these bonds and Bradford & Bingley plc would suggest that you obtain advice from your own advisers (for example, legal, tax, stock-broking and so forth).

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