FORMER building society, the Bradford & Bingley, made its debut on the London Stock Market yesterday with policyholders opting to sell their shares immediately, landing £620 payouts.

The City valued the business at around £1.73bn, based on its opening share price of 254p, with the figure at the lower end of what the market had previously forecast.

In early trading the shares fell back to 247p, valuing the B&B at £1.68bn.

An auction of the free shares on Friday through the Initial Share Sale Facility which the B&B provided for policyholders, ended with the shares being sold for an average price of 247.86p.

At 250 shares each, this equated to an average payout of nearly £620, although a minority of members who have both mortgage and savings accounts received 500 shares each meaning they will receive about £1,240.

It had been hoped policyholders would pick up about £700 each.

Members representing 38.5 per cent of the issued share capital opted to sell their shares and should receive their cheques by December 11.

Tom Rayner, banking analyst with Dresdner Kleinwort Benson, said that this close to Christmas it was not surprising that such a large number of policyholders had decided to cash in.

The mortgage banking sector had been under pressure of late, which was why the B&B had floated at the lower end of expectations and the City would now be watching very closely to see how its strategy panned out.

He predicted that for those investors wishing to hang on to their shares, the price could eventually lift, perhaps to as high as 300p, if the B&B could show it was heading in the right direction.

But he warned that "this is not going to be a raging performer that people will be kicking themselves about having sold".

It was back in July that the members of the Bradford & Bingley, which was Britain's second-biggest building society, voted in favour of a stock market flotation.

In total, 2.7 million members of Bradford & Bingley received shares