Treasury splits Northern Rock

Northern Rock debacle

According to the Treasury's statement, the "bad bank," which will now stop offering new mortgages, has now officially been renamed as Northern Rock (Asset Management). The government now plans to sell the remainder of the business - the "good bank" - back to the private sector.

In fact, several firms have reportedly already expressed an interest in wanting to buy the bank: Virgin Money, for instance, who already tried to buy the firm before its nationalisation in 2008, is again keen to acquire the remainder of the business; while the National Australia Bank is also reportedly considering launching a bid after advisers including Citigroup, Lazard, Credit Suisse and Morgan Stanley suggested that such a move would be beneficial to the bank.

According to the Treasury, while the new bad bank has a residential mortgage book of about GBP£50 billion and GBP£4.5 billion of unsecured personal loans, 90 percent of the bank's mortgage book is still out of arrears.

Related Articles:

Northern Rock sale | Northern Rock green light | Down and out

Like this article? Get the RSS feed: