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05/08/2008
Northern Rock To Get £3 Billion Cash Injection
In its first results as a nationalised bank, Northern Rock has announced first half year pre-tax losses of £585 million.
However, the bank has also announced that net borrowings provided by the Bank of England have reduced by £9.4bn to £17.5bn from £26.9bn at the end of December 2007, representing a 35% reduction.
Now it has emerged that the Government, which nationalised the lender in February, is set to inject a further £3bn to help its finances.
The cash boost will come from suspending payments of the loan made to the bank and about £3bn of that being converted into equity.
Chancellor Alistair Darling told BBC Radio 4's Today Programme that Northern Rock found itself in a "very difficult position" and that the bank "needs more shared capital".
"We've got to get state aid approval for that so we can't give a precise figure, but up to £3bn will be necessary," he said.
The Newcastle-based bank said that "the deterioration in market conditions, particularly the downturn in the housing market, has led to the need to strengthen the capital position of the company to meet regulatory capital requirements".
The bank also said that residential arrears over three months have "more than doubled" since the start of the year to 1.18% (0.45% at the end of 2007).
Executive Chairman, Ron Sandler said: "On a net basis, the Government debt has reduced by £9.4bn since the start of the year, which is considerably ahead of plan. Operational restructuring is well advanced and both the Board and management team have been bolstered by key new appointments. We have also substantially overhauled the risk procedures in the company.
Mr Sandler added: "I wish to thank all members of staff and applaud their maintenance of the highest levels of customer service and professionalism in what has undoubtedly been a most difficult time for Northern Rock's employees."
The bank is increasing staff numbers in debt management from 185 to around 500 for those customers who find it difficult to make ends meet.
Northern Rock has also advanced some loans worth as much as 125% of home values, to some customers.
The bank was taken into public ownership earlier this year when it failed to find a suitable buyer from the private sector and in a scaling-back process, Northern Rock reduced the number of its mortgage accounts by 15%.
Loans and advances to customers have also been cut back by £14.5bn.
Last week, the bank also announced that it was to cut 1,300 jobs in an effort streamline the business.
See: Northern Rock Reveals Job Cuts
(DS)
However, the bank has also announced that net borrowings provided by the Bank of England have reduced by £9.4bn to £17.5bn from £26.9bn at the end of December 2007, representing a 35% reduction.
Now it has emerged that the Government, which nationalised the lender in February, is set to inject a further £3bn to help its finances.
The cash boost will come from suspending payments of the loan made to the bank and about £3bn of that being converted into equity.
Chancellor Alistair Darling told BBC Radio 4's Today Programme that Northern Rock found itself in a "very difficult position" and that the bank "needs more shared capital".
"We've got to get state aid approval for that so we can't give a precise figure, but up to £3bn will be necessary," he said.
The Newcastle-based bank said that "the deterioration in market conditions, particularly the downturn in the housing market, has led to the need to strengthen the capital position of the company to meet regulatory capital requirements".
The bank also said that residential arrears over three months have "more than doubled" since the start of the year to 1.18% (0.45% at the end of 2007).
Executive Chairman, Ron Sandler said: "On a net basis, the Government debt has reduced by £9.4bn since the start of the year, which is considerably ahead of plan. Operational restructuring is well advanced and both the Board and management team have been bolstered by key new appointments. We have also substantially overhauled the risk procedures in the company.
Mr Sandler added: "I wish to thank all members of staff and applaud their maintenance of the highest levels of customer service and professionalism in what has undoubtedly been a most difficult time for Northern Rock's employees."
The bank is increasing staff numbers in debt management from 185 to around 500 for those customers who find it difficult to make ends meet.
Northern Rock has also advanced some loans worth as much as 125% of home values, to some customers.
The bank was taken into public ownership earlier this year when it failed to find a suitable buyer from the private sector and in a scaling-back process, Northern Rock reduced the number of its mortgage accounts by 15%.
Loans and advances to customers have also been cut back by £14.5bn.
Last week, the bank also announced that it was to cut 1,300 jobs in an effort streamline the business.
See: Northern Rock Reveals Job Cuts
(DS)
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03 August 2010
Northern Rock Steadfast In Recovery
The boss of a once beleaguered UK bank is "encouraged" by news that nationalised Northern Rock's - a so-called 'bad bank' - has returned to profit following heavy losses last year in the wake of a bail-out by the taxpayer in 2008. Chief Executive Gary Hoffman said the Northern Rock 'AM' results were 'encouraging'.
Northern Rock Steadfast In Recovery
The boss of a once beleaguered UK bank is "encouraged" by news that nationalised Northern Rock's - a so-called 'bad bank' - has returned to profit following heavy losses last year in the wake of a bail-out by the taxpayer in 2008. Chief Executive Gary Hoffman said the Northern Rock 'AM' results were 'encouraging'.
23 February 2009
Northern Rock To Begin Mortgage Lending Again
Nationalised bank Northern Rock is to make £14 billion available for new mortgages by 2011, it has been announced. The move follows Chancellor Alistair Darling's decision last month to reverse the wind-down of its loans, and is part of wider plans to restructure the group.
Northern Rock To Begin Mortgage Lending Again
Nationalised bank Northern Rock is to make £14 billion available for new mortgages by 2011, it has been announced. The move follows Chancellor Alistair Darling's decision last month to reverse the wind-down of its loans, and is part of wider plans to restructure the group.
17 September 2007
Customers Continue To Withdraw Funds From Northern Rock
Worried Northern Rock customers are continuing to withdraw their savings from the beleaguered mortgage lender. Around £2billion has been withdrawn from Northern Rock branches across the UK since Thursday, when the firm applied for emergency funding from the Bank of England.
Customers Continue To Withdraw Funds From Northern Rock
Worried Northern Rock customers are continuing to withdraw their savings from the beleaguered mortgage lender. Around £2billion has been withdrawn from Northern Rock branches across the UK since Thursday, when the firm applied for emergency funding from the Bank of England.
18 March 2008
Northern Rock Jobs Under Threat
Troubled bank Northern Rock has said that it will cut around 2,000 jobs. The cuts have been anticipated as part of the chairman Ron Sandler's restructuring plans for the nationalised mortgage lender. Northern Rock currently owes the Bank of England about £25 billion after it bailed out the company last year.
Northern Rock Jobs Under Threat
Troubled bank Northern Rock has said that it will cut around 2,000 jobs. The cuts have been anticipated as part of the chairman Ron Sandler's restructuring plans for the nationalised mortgage lender. Northern Rock currently owes the Bank of England about £25 billion after it bailed out the company last year.
18 May 2012
Northern Rock Rescue "Could Cost Taxpayer £2bn"
The National Audit Office (NAO) has estimated that taxpayers could lose almost £2bn once the assets of collapsed bank Northern Rock are wound down. The public spending watchdog also said that taxpayers lost about £480m on the sale of Northern Rock PLC last year.
Northern Rock Rescue "Could Cost Taxpayer £2bn"
The National Audit Office (NAO) has estimated that taxpayers could lose almost £2bn once the assets of collapsed bank Northern Rock are wound down. The public spending watchdog also said that taxpayers lost about £480m on the sale of Northern Rock PLC last year.
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