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Thursday 24th of July 2008

Latest Northern Rock News

The latest news on the Northern Rock Building Society:

July 1, 2008

New measures to help savers after near-collapse of Northern Rock

by Kay Murchie
”New
Chancellor of the Exchequer, Alistair Darling, has announced new measures to protect savers who lose money as a result of a bank getting into financial difficulty. The Government has also asked the Financial Services Authority to consult on increasing the current threshold for compensation from £35,000 to £50,000. Any changes will come into effect in the autumn ...



Northern Rock borrowers trapped on expensive rates

by Kay Murchie
Northern Rock borrowers trapped on expensive rates
Mortgage customers of Northern Rock who are seeing their fixed-rate mortgages run out are facing huge increases because they are trapped on expensive rates with the crisis-torn lender. The business plan for the nationalised bank saw attractive rates scrapped in an attempt to put-off new customers and encourage existing ones to re-mortgage with another lender. Those who borrowed 100% of their ...



June 5, 2008

Northern Rock in mortgage deal with Lloyds TSB

by Kay Murchie
”Northern
A new deal has been reached between Northern Rock and Lloyds TSB, whereby Lloyds TSB will offer mortgages to Northern Rock customers when their deal with the lender expires. Lloyds will cherry-pick Northern Rock customers and send them letters when their current fixed-rate term is nearing the expiry date. The bank said the standard application fee will be waived. Ron ...



May 30, 2008

Mortgage fears grow at Northern Rock

by Kay Murchie
”Mortgage
An internal memo at Northern Rock has unveiled that the crisis-torn bank is expecting to see a vast increase in the amount of customers struggling to pay off their mortgage over the next 12 months. As a result, the bank is proposing to more than double the number of people who work in its debt management arm from 176 to 444. ...



May 21, 2008

Northern Rock loan repayments could be delayed by house price falls

by Kay Murchie
”Northern
Northern Rock chairman, Ron Sandler, has warned that sharp house price falls could delay its plans to repay the billions of pounds it owes the Bank of England. Mr Sandler said if house prices were to decline 5%, 10% or 15%, that would seriously impede fulfilling the plan and added I can't give you a single ...



May 13, 2008

Loan facilities reducing say Northern Rock

by Kay Murchie
”Loan
Ron Sandler, who was appointed by the Government to revive Northern Rock, said solid progress has been made against the business plan. The Bank of England loan facilities are reducing and the balance sheet is contracting as a result of planned mortgage redemptions, added Mr Sandler. Mr Sandler's strategy is to reduce the mortgage book. He has set up a panel within the ...



May 11, 2008

Northern Rock shareholders commence legal proceedings

by Kay Murchie
”Northern
Shareholders of crisis-torn Northern Rock have commenced legal proceedings against the Government to claim compensation for nationalising the bank as they believed it was still a viable company. The UK Shareholders Association (UKSA) has submitted an application for judicial review which questions the terms under which the bank was nationalised, which will leave its 15,000 private shareholders with almost nothing. The ...



May 2, 2008

Northern Rock commences talks with staff over 2,000 job losses

by Kay Murchie
”Northern
Crisis-torn Northern Rock, which was taken into public ownership on February 22, has commenced talks with staff over plans to axe 2,000 jobs. Northern Rock said the company will now commence the formal 90-day consultation period with Unite and other employee representatives, with the inaugural meetings planned for May 1, 2008. The likely start date for any ...



April 25, 2008

Shareholders of Northern Rock proceed with legal action

by Kay Murchie
”Shareholders
The Government took Northern Rock into public ownership on February 22 and shareholders were believed not to be in favour of the nationalisation and have since been threatening legal action. The UK Shareholder's Association (UKSA) (acting on behalf of the Northern Rock’s shareholders) believes that the UK Government confiscated the shares even though there was a good private sector solution ...



April 15, 2008

Northern Rock yet to pass on interest rate cuts

by Kay Murchie
”Northern
Despite calls by the Government for mortgage lenders to pass on interest rate cuts to borrowers, nationalised Northern Rock still has not passed on last week’s interest rate cut. The crisis-torn bank said its standard variable rate (SVR) is still under review after Chancellor Alistair Darling said lenders should do more to help homeowners. A spokesperson for Northern Rock ...



April 3, 2008

EU launches investigation into Northern Rock bailout

by Kay Murchie
”EU
The European Commission have launched an investigation into the Government’s multi-billion pound survival plan for crisis-torn bank Northern Rock. The investigation is expected to run for several months and will study the rescue plan proposed by chairman Ron Sandler earlier this week. It will also determine whether the special support complies with the European Union’s strict rules on state aid. Competition ...



April 1, 2008

Northern Rock confirms job cuts, promises to repay taxpayers

by Kay Murchie
”Northern
Northern Rock revealed yesterday that it would not break even for 3 years but pledged to repay its £24 billion state loan. Furthermore, the crisis-torn bank has confirmed it will cut costs by 20% and make 2,000 job cuts. The bank said it is in talks with workers' unions and is in the process of deciding how and where ...



March 31, 2008

Northern Rock to reveal huge write-downs

by Kay Murchie
”Northern
Crisis-torn Northern Rock is set to reveal huge write-downs when it announces its 2007 results later today, months later than originally planned. Interest payments to the Bank of England and provisions against its mortgage book wiped out its profits last year. Back in September, Northern Rock said it was on target to make profits of over £500 million but increasing charges have ...



March 26, 2008

FSA to reveal Northern Rock crisis report

by Kay Murchie
”FSA
An internal review of how Northern Rock’s financial health was handled is to be published by the Financial Services Authority (FSA). The review, which was executed by the FSA's director of internal audit, is expected to conclude that too few staff were monitoring Northern Rock when its problems started and there was a lack of stability in the supervisory team. The ...



March 19, 2008

2,000 jobs to go at Northern Rock

by Kay Murchie
”2,000
Newcastle-based Northern Rock has announced it will shrink its residential mortgage lending by half and is to shed approximately 2,000 jobs. The job cuts, which make up about a third of its staff, will be made by 2011 under plans to turn around the bank's fortunes. Northern Rock is one of the biggest employers in the North East, with approximately 6,500 ...



March 16, 2008

Northern Rock to deliver outline business plan to the EU

by Kay Murchie
”Northern
Chancellor Alistair Darling is to submit to Brussels tomorrow formal notification that he wants to continue giving state aid to Northern Rock as part of proposals expected to include a drastic reduction in the size of the bank’s mortgage book and heavy job losses. The full proposal may not be presented by Ron Sandler, the bank’s chairman, until ...



March 12, 2008

Northern Rock withdraws from sub-prime mortgages

by Kay Murchie
”Northern
Ron Sandler, who has been placed in charge of crisis-torn Northern Rock, recently set the Rock’s new mortgage rates at uncompetitive levels, in a conscious effort to drive away new business. Northern Rock has now announced it is exiting from Britain’s sub-prime mortgage market. The retreat from low-income home loans, which Northern Rock arranged on behalf of Lehman Brothers 12 months ...



March 7, 2008

Shareholders in Northern Rock remain in the dark

by Kay Murchie
”Shareholders
Shareholders in Northern Rock are in the dark as to when and how they might receive any compensation. The crisis-torn bank was nationalised last month after the Government rejected takeover bids from the board of Northern Rock and a consortium led by Sir Richard Branson’s Virgin Group. It was revealed earlier this week that Jon Wood, the fund-manager behind SRM Global ...



March 6, 2008

Chancellor excluding Northern Rock from next week’s Budget

by Kay Murchie
”Chancellor
Chancellor Alistair Darling has come under fire for his plans to exclude Northern Rock out of next week’s Budget. Mr Darling plans to leave out Northern Rock’s estimated £100 billion liabilities from the headline figures, instead, the figures are to be treated as a special item. Legal & General, one of the bank's largest shareholders, has spoken out against the ...



March 4, 2008

Northern Rock shareholder threatens legal action

by Kay Murchie
”Northern
One of Northern Rock’s biggest shareholders has threatened to commence legal action against the crisis-torn bank. A law suit, which could name Chancellor Alistair Darling and Bank of England Governor Mervyn King, would be a major headache for Mr Darling just a week before his first budget on 12 March. Jon Wood, the fund-manager behind SRM Global with a 12% stake ...