Bosses at nationalised lender Bradford & Bingley have deferred bonuses, despite the bank performing better than expected in 2009.

In 2009, B&B’s chairman Richard Pym waived his entitlement to a guaranteed bonus of £187,500 and managing director Richard Banks, who joined Bradford & Bingley last year, voluntarily deferred his entitlement to a bonus payment of £10,000 for 2009.

The annual report also revealed a bonus tax liability of £37,000 after eight employees, including one director, earned bonuses totalling £274,000 for 2009, Payouts have been deferred for three years B&B, which is running down its mortgage book, imposed a pay freeze for senior management except for promotions.

There were no long-term share or other incentive schemes and no directors received a cash bonus in respect of 2009 that would have been payable in 2010.

Bradford & Bingley posted annual losses of £196 million for the year to December 31 as write-offs on bad debts and fraud almost doubled.

Although this was less than the £278 million in 2008, and a better result than expected in its business plan, the firm took an £884.1 million loan hit – up from £467.7 million in the previous year.

Of this, £388.4 million came through provisions for fraud and professional negligence, which the former buy-to-let specialist said mostly related to property valuations during the housing boom.

B&B is running down its mortgage loan book after being rescued by the taxpayer in September, 2008, when its savings business was sold to Spain’s Santander. Mr Banks, said: “We have made substantial progress against our business objectives in 2009 and met all of the financial goals in our agreed business plan. The loss before tax of £196 million for the year was £71 million better than our original plan.

“We have completed our restructure to create an organisation that is fit for purpose to deliver a high-quality service to our customers whilst reducing costs, minimising losses and delivering value to the taxpayer.”

Although 5.54 per cent of B&B’s £38 billion loan book is in arrears, this is lower than the 5.88 per cent in the first half of 2009, thanks to lower interest rates and almost 100 extra staff focused on collection. The downward trend has continued so far during 2010 with arrears performance ‘better than anticipated’, the B&B said.

The lender made more than 12,000 special arrangements to help customers falling behind with repayments last year, as well as supporting tenants left high and dry by bust buy-to-let investors.

Mr Banks said the firm’s former head office building in Main Street, Bingley, which is now empty, remained up for sale. There have been no takers.

Meanwhile, part-nationalised Lloyds Banking Group has predicted a return to profit this year after lower than expected bad debts.

The bank, which is 41 per cent state-owned, racked up £24 billion in bad debts during 2009 – mainly due to the toxic debts in the HBOS loan book – which led to a £6.3 billion loss last year.

But the group said: “Impairment provisions are currently trending at lower levels than anticipated and, as a result, the group now expects to deliver a better impairment performance than previously guided in both the retail and corporate businesses in 2010.”