Chancellor to announce Northern Rock sale
In his Mansion House speech later this evening, Chancellor George Osborne is to announce plans to sell off state-owned Northern Rock.
The crisis-torn bank, which collapsed on the eve of the credit crisis, is expected to be auctioned off and will raise around £1 billion.
The Chancellor will say he hopes to find a buyer for the lender by the end of the year.
The Newcastle-based lender was split into two divisions – a “good bank” of profitable assets and a “bad bank” of toxic debts.
The good bank will be sold, while the bad bank will continue to be state-owned.
The sale comes on the recommendation from UK Financial Investment (UKFI), the body which was established at the height of the financial crisis to oversee taxpayers’ interests in High Street banks.
UKFI concluded that a sale is the better option, rather than a stock market flotation.
In the meantime, in tonight’s speech, Mr Osborne will also confirm that banks will have to ring-fence their retail operations so they are protected from losses from investment banking.