Member Article

Reports that Tesco will buy Northern Rock dismissed.

Unconfirmed claims that Tesco will buy Northern rock have been dismissed by the bank.

It was claimed that the supermarket would potentially bid for the nationalised bank, along with Virgin, who have tried to buy the bank before.

The bank is currently going through a “restructuring process” that will require EU approval, and until this happens the bank will not be sold.

An unnamed source said: “There is no sales process in place. The bank has to get through its state aid approval and restructuring process before there are any other considerations.”

Both Tesco and Virgin said they do not comment on market speculation.

A Northern Rock spokesman said: “In the period prior to the provision of further capital, Northern Rock will continue to operate as normal.”

Last week it emerged the bank will be split in two, as BankCo and AssetCo, later in the year.

BankCo will hold savers’ money, handle some mortgages and carry out new lending, while AssetCo will hold the rest of the mortgages and be responsible for repaying the outstanding £8.9bn government loan.

The European Commission must be satisfied the new business plan does not breach European aid rules, which says the aid package for the bank has to be the minimum necessary to allow long-term viability.

This was posted in Bdaily's Members' News section by Ruth Mitchell .