As if Bradford & Bingley did not have enough to contend with, it now finds itself victim of professional mortgage fraudsters.

The embattled buy-to-let lender took an £18 million charge against frauds that came to light in the first half, although it claims it will recover at least some of this.

The charge accompanies bleak news that mortgage arrears were running at a worrying 2.29 per cent and are unlikely to improve over the next six months.

B&B issued £4.4 billion in mortgages in the first half and £1.9 billion in loans, both precipitous drops on the same period the previous year.

The first-half loss was an unhappy £26.7 million, but was entirely expected.

B&B cannot be the only high street lender to have been hit by lending scams and at least it is being transparent in declaring the hit.

It has also scaled back its loans and mortgages as it begins the process of properly cutting its suit to fit its cloth. But its preference for self-certification mortgages could be seen as making it more vulnerable to the unscrupulous. Analysts reckon that more than a fifth of B&B's loans book is composed of these borrowers.

The bigger worry is that B&B is still geared to the fortunes of a housing market whose medium term outlook is bleak. Nor are the shares, which at 48.5p, sit at nearly 11 times next year's earnings, especially cheap. Avoid.

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