UK banks set to take stake in troubled B&B: sources

By Clara Ferreira-Marques and Steve Slater

LONDON (Reuters) - Britain's largest banks could be left with over a quarter of Bradford & Bingley (BB.L: Quote, Profile, Research), sources familiar with the matter said on Tuesday, as the troubled bank's shares fell further below the price of a planned rights issue.

With pressure growing on Britain's regulators and the broader banking sector to avoid a repeat of the damaging collapse of rival lender Northern Rock last year, the sources said six clearing banks had agreed to back B&B's underwriters.

"It is in everyone's interest that there is confidence in the market," one of the sources said.

HSBC (HSBA.L: Quote, Profile, Research), Lloyds TSB (LLOY.L: Quote, Profile, Research), HBOS (HBOS.L: Quote, Profile, Research), Barclays (BARC.L: Quote, Profile, Research), Abbey (SAN.MC: Quote, Profile, Research) and Royal Bank of Scotland (RBS.L: Quote, Profile, Research) have agreed to sub-underwrite about half of the bank's planned 400 million pound rights issue, sources said.

That would leave the banks holding over 30 percent of its enlarged share base, based on its current market value of around 220 million pounds and the capital injection.

B&B declined to comment.

The offer is fully underwritten by Citi and UBS, and four of B&B's top shareholders are estimated to be sub-underwriting 145 million pounds of the total. The offer is open until mid-August.

But concerns over B&B's future beyond the cash call and the impact of a deteriorating UK economy took shares in Britain's largest buy-to-let lender even lower on Tuesday.