Partner Article

Rock splits as buyers circle

Nationalised bank Northern Rock was split into two this week as news emerged of parties interested in taking over the so-called ‘good’ half of the North East lender.

Northern Rock spun off a savings and mortgage bank called Northern Rock plc on Friday 1 January. This ‘good bank’ is expected to be sold off into the private sector.

Its more toxic loans have been retained in the existing bank, renamed Northern Rock (Asset Management) plc, which will remain in public ownership.

Suitors are reportedly lining up to take over the good bank as the Government is expected to begin the sale process soon.

Virgin Money, headed by chief executive Jayne-Anne Gadhia, is widely seen as a frontrunner having launched a failed bid for Northern Rock before it fell into public hands.

National Australia Bank, which owns Clydesdale and Yorkshire banks in the UK, was also reported at the weekend to be considering entering the fray.

Bidders for Northern Rock would land a company with about £19 billion in retail savings and some £10 billion in residential mortgages. It is taking on new business and said it was benefiting from a “strong capital and liquidity position” following the bank’s split.

As the split was finalised, Northern Rock assured its customers that business would continue as usual. Gary Hoffman, Chief Executive said:

“I am pleased to announce that we have successfully completed the legal and capital restructure of the business. This helps to build a stronger future and delivers value to taxpayers.

“All savings accounts have been transferred to the new bank and we are writing to our savings customers to confirm that. We are also writing to mortgage customers of the new bank to confirm that their accounts have been transferred as part of the restructure. Our aim was to make this process as smooth as possible for all of our customers. They do not need to take any action and can continue to contact us in the usual ways.”

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