New B&B CEO to outline strategy in October

LONDON (Reuters) - Bradford & Bingley's new boss said on Monday it was still too soon to outline his strategy for the UK bank, but said he would be looking at underperforming books including loans it agreed to buy from finance firm GMAC.

Richard Pym, appointed chief executive of Britain's largest buy-to-let lender earlier on Monday, told Reuters the worst was over for the mortgage bank, adding he expected to give his first "serious remarks" on strategy in October, when the bank is due to give a third-quarter trading update.

"I don't think there is a banking chief executive in the world who doesn't have some issues to address at the moment, and I haven't seen anything to date that I don't feel confident we can't resolve," he said in a telephone interview.

"Obviously there are some specialist loans which have got high arrears at the moment but the core lending book, the prime buy-to-let book, is very solid," the former head of rival bank Alliance & Leicester ALLL.L said.

Pym said he would be taking a close look at B&B's deal with GMAC "because obviously that contract still has some way to run", but said it was unclear whether the bank would be able to extricate itself from the agreement.

Most of B&B's problems with customer arrears come from loans it agreed to buy from GMAC under a deal renewed in December 2006. Under the current deal it must buy at least 350 million pounds of loans per quarter, or a minimum of 2.1 billion pounds to the end of 2009.

Pym's arrival has revived some speculation of an eventual takeover approach for B&B, but he agreed with analysts who say it is still too soon to talk of deals in the sector.

"I do think the current level of bank valuations will increase the pace of consolidation generally across Europe and beyond that, but markets will need to recover from current levels before most banks will even be considering acquisitions," he said. "I don't know whether that will involve B&B or not."

(Reporting by Clara Ferreira-Marques)