Split Bank Before Sale

Friday, June 12, 2009 20:42
Posted in category News

According to investment bankers examiming the feasibility of a sale of the Northerrn Rock, it is learnt that the bank should be split into two businesses, with retail deposits in one unit and mortgages in the other.
Under such an arrangement, which is one of a number of options being considered, the Treasury would try to sell the £19.5 billion package of retail deposits separately from the £66.7 billion Northern Rock mortgage book. In this instance, the buyer of the mortgage business would also have to asume the bad loans held by Northen Rock.
It also emerged that there had been tension between the Shareholder Executive, which oversees government-owned businesses such as Royal Mail, and UK Financial Investments, over Rock.
One of the Treasury’s primary concerns over preparing a sale of Northern Rock is what credit rating the lender would attract. For buyers, a key element will be working out whether the bank’s cost of funding would allow them to make profits.

Share and Enjoy:

  • Digg
  • Sphinn
  • del.icio.us
  • Facebook
  • Mixx
  • Google Bookmarks
  • Technorati
  • Twitter
  • Live
  • MySpace
  • Netvibes
  • StumbleUpon
  • NewsVine
  • Ping.fm
  • Reddit
  • Yahoo! Bookmarks

Related posts:

  1. Northern Rock Sale Leaves Taxpayer with £400m Bill
    George Osborne was criticised for locking the taxpayer into a...
  2. Lloyds Sets Deadline as it Pushes Ahead with Branch Sale
    Lloyds Banking Group has put up its 632 branches for...
  3. Possible Extra Aid for Bank of America
    Bank of America could receive an additional bailout of...
  4. Goodyear and Temasek Split
    A major rift over strategy has prompted Charles “Chip” Goodyear...
  5. Doubt Over Royal Bank Holiday
    Business Link, the government’s online support service, has told...
You can leave a response, or trackback from your own site.

Leave a Reply

ss_blog_claim=525c1fce334ae6929f33f2287bed57aa ss_blog_claim=525c1fce334ae6929f33f2287bed57aa