Record losses for Bank of Mum and Dad, share price plunges
Shares in the Bank of Mum and Dad collapsed today after the financial giant announced record £10 billion losses.
Investors took fright after bank bosses confirmed £6.5 billion in interest free housing loans had to be written off because customers had defaulted on repayments.
And today’s annual report also disclosed a software glitch had seen hundreds of cashpoint machines giving out piles of money for free.
The news wiped £2 billion of the Bank of Mum and Dad’s value as its share price plunged 79p to £1.57.
Mr Stephen White, the Bank of Mum and Dad’s CEO, said: “It has been a challenging year for us in difficult times. We have been called upon to fork out record amounts of cash for home loans, but have not received anything back.
“Our business cash flow has also been hit by problems with cash being given out for free up and down the country.”
Mr White confirmed things will get worse before they get better. “We have also been allowing customers to live as long as they want rent free in our branches.
“They used to look for somewhere else to doss down when they were 18, but now they hang around until past 30.”
Investment experts this morning downgraded the Bank of Mum and Dad credit rating to ‘B’.
Financial markets expert Joachim Summersby said: “It’s a tough time for the Bank of Mum and Dad. It had spent years building up its cash reserves, but now much of it has been given away effectively for nothing to young customers.
“This is putting enormous strain on bank cash flow and some branches are expected to close as a result.”