BC-EU--EU-Britain-Bank Bailouts,0271

British bank rescue plans get EU approval

BRUSSELS (AP) -- Britain's plans to wind up mortgage lender Bradford & Bingley and restructure Dunfermline Building Society won European Union approval on Monday, the final hurdle for the last of a raft of British bank bailouts.

Britain has pledged 18.6 billion pounds to compensate depositors in the nationalized Bradford & Bingley and 1.6 billion pounds to support restructuring of the Dunfermline Building Society.

The European Commission said it authorized British government rescue measures and a potential capital injection for Bradford & Bingley saying they were "appropriate and necessary for an orderly winding down."

Britain nationalized Bradford & Bingley in 2008, taking over the bank's problem assets and selling off its retail deposits and branches to Spain's Santander. The bank is no longer active but will continue offering limited services to existing clients.

The EU said Britain could sell off the bank's remaining assets when market conditions pick up and that regulators would monitor the winding-down and its impact on competition.

Bradford & Bingley ran into trouble in September 2008 when it could not secure wholesale financing during a credit freeze because of market worries over its risky assets. It granted nearly 8 percent of new mortgages in 2007.

EU regulators also approved British government aid of 1.5 billion pounds and a working capital loan of 10 million pounds to help the break-up and sale of Dunfermline Building Society and a working capital loan of 10 million pounds.

Dunfermline, based in Scotland, was split into two parts, with its good quality assets and liabilities sold off to rival Nationwide Building Society. Its impaired assets were put into administration.