SHARES in Bradford & Bingley, the former building society, slid 3 per cent to 329p yesterday amid signs of a slowdown in the buy-to-let housing market.

The bank is a major provider of buy-to-let mortgages, in which it has outstanding loans of £11 billion. This represents nearly a quarter of the buy-to-let market and more than half of B&B’s mortgage business.

B&B reported a 6 per cent rise in profits before exceptionals, to £280.2 million, for the year to the end of December. Profits from lending, the bulk of its activity, increased by 9 per cent to £249.6 million.

Steve Crawshaw, chief executive, said that buy-to-let mortgages would continue to be an important part the bank’s business. “While the rate of growth in buy-to-let is moderating, it continues to grow at a rate considerably above that of the whole mortgage market.”

Recent figures from the Council of Mortgage Lenders showed that new buy-to-let mortgages had fallen from £12 billion in 2003 to £9.6 billion last year as returns for landlords dropped.

Despite the rise in underlying profits, B&B revealed the costs of reversing the diversification strategy established by the former chief executive, Christopher Rodrigues. B&B lost £123.2 million on the sale of five non-core businesses, including the Charcol mortgage broking business which was sold for £10 million after costing £100 million four years ago.

Mr Crawshaw said he wanted to concentrate on lending and savings, as well as continuing with a cost-cutting drive.

Analysts at ABN Amro downgraded B&B, highlighting the lower than expected income growth at the bank.