Open

Coming up

Don't miss

Replay


LATEST SHOWS

MEDIAWATCH

Israeli strikes on Gaza as seen on social media

Read more

DEBATE

Africa's Newest Failed State: How to Stop Civil War and Famine in South Sudan? (part 2)

Read more

DEBATE

Israel and the Palestinians: How to Break the Cycle of Violence?

Read more

DEBATE

Africa's Newest Failed State: How to Stop Civil War and Famine in South Sudan?

Read more

AFRICA NEWS

Somalia : Al Shebab attack on presidential palace

Read more

FOCUS

Sharia law to be enshrined in British legal system?

Read more

ENCORE!

How a comedy dud became one of France's biggest box office hits

Read more

AFRICA NEWS

Kenya: Clashes at anti-government rally in Nairobi

Read more

WEB NEWS

ISIS leader challenged over expensive-looking wristwatch

Read more

  • Israeli airstrikes continue in Gaza as rockets intercepted over Tel Aviv

    Read more

  • Argentina beat Netherlands on penalties to reach World Cup final

    Read more

  • Foiled French jihadist ‘targeted Louvre and Eiffel Tower’

    Read more

  • Obama in Texas to urge congressional action on child migrant crisis

    Read more

  • Iraq’s heritage 'in danger' from ISIS militants

    Read more

  • Froome crashes out of Tour de France

    Read more

  • South Sudan independence heroes ‘have lost their way’

    Read more

  • Dozens of blindfolded bodies found south of Baghdad

    Read more

  • Alps Murder wife had ex-husband who died on same day

    Read more

  • Both candidates say they won Indonesian presidential election

    Read more

  • Brazil players should never wear 'sacred uniform' again, press says

    Read more

  • Exiled Syrian opposition elects new president

    Read more

  • China’s first Tour de France cyclist chases his dream

    Read more

  • Ukraine imposes new conditions on peace talks with pro-Russia rebels

    Read more

  • Sarkozy's UMP party 'almost €80 million in debt'

    Read more

Business

British government sells failed Northern Rock bank to Virgin

©

Video by FRANCE 24

Text by News Wires

Latest update : 2011-11-17

Britain’s finance ministry announced Thursday it had agreed to sell Northern Rock, a failed mortgage lender that was nationalised during the financial crisis in 2008, at a major loss to Virgin Money.

REUTERS - The British government has agreed to sell Northern Rock, the failed mortgage lender it nationalised in 2008, to Virgin Money, the banking arm of Richard Branson’s Virgin empire.

Northern Rock, the first banking asset bought by the government during the financial crisis to be offloaded, will fetch between 747 million and 1 billion pounds ($1.2 billion - $1.6 billion) in cash, the finance ministry said on Thursday.
 
Even at the upper end that would mean a 400 million pound loss on the 1.4 billion pounds in equity pumped into the lender by taxpayers at the height of the credit crunch.
 
“The sale of Northern Rock to Virgin Money is an important first step in getting the British taxpayer out of the business of owning banks,” Chancellor of the Exchequer George Osborne said in a statement on Thursday.
 
The combination of Northern Rock and Virgin Money should also increase competition in British retail banking, challenging the dominance of HSBC, Barclays, Lloyds Banking Group, Santander and Royal Bank of Scotland, the UK Treasury said.
 
Under the deal, Virgin Money has pledged not to make any further compulsory redundancies from the combined bank, and to maintain Northern Rock’s existing branch network.
 
Northern Rock, a former mutual that used cheap wholesale credit to grow aggressively in the British mortgage market, was nationalised in early 2008 after banks abruptly stopped lending to each other in the credit crisis, starving it of funding.
 
Virgin Money was one of several companies that expressed interest in buying Northern Rock during a failed attempt to sell the bank in late 2007.
 
The British government still holds an 83 percent stake in RBS and 41 percent of Lloyds, a legacy of its efforts to prop up the banking sector during the financial meltdown.

 

Date created : 2011-11-17

  • UK

    London’s ‘Occupy’ protesters threatened with eviction

    Read more

  • UNITED KINGDOM

    UK unemployment hits 15-year high

    Read more

  • UK

    UK students march on London in new fees protest

    Read more

Comments

COMMENT(S)