Northern Rock’s Guernsey operation to close in September

| June 2, 2010
”Northern

Nationalised Northern Rock has today announced it is to close its banking operation in Guernsey on 2 September.

The closure of Guernsey‘s activities, which come after a review of offshore operations, is the latest step in the bank’s turnaround plan.

Its Guernsey operation was launched in February 1996 and it currently has some 6,000 customers, of which have received letters giving them three months’ notice to close their accounts.

Commenting on the announcement, Gary Hoffman, the Rock’s chief executive, said: “The board considers the closure of our Guernsey operation to be a necessary step as we continue to prepare the company for a return to private ownership and to deliver value to the taxpayer.

“The closure will be conducted in an orderly manner, over a three-month period, and we aim to make the process as easy as possible for customers,” he added.

Last month, savers with Northern Rock lost the 100% guarantee on their cash.

The move, which was announced back in February, means the crisis-torn bank is back in line with its rivals but savers will still benefit from the £50,000 guarantee to all savers under the Financial Services Compensation Scheme (FSCS).

The 100% guarantee was put in place after Northern Rock collapsed in the autumn of 2007 when savers staged a nationwide run on the bank. This signalled the onset of the banking crisis.

Earlier this year Northern Rock was split into two divisions – a “good bank” of profitable assets and “bad bank” of toxic debts.

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