Northern Rock Share Discussion Threads

[grbaker] 27/4/2009 17:00

Looks like another cynical attempt by HMG to convince us all that NRK is worthless and, therefore, we should not be surprised when the value comes out at zero or close to that for all the ex. shareholders.

Meanwhile... the legal challenge to the valuation continues...

[kpwuk] 27/4/2009 10:10

frankiestheone. And similarly, you should be given the opportunity to buy back your own car? :o)

[frankiestheone] 26/4/2009 23:34

this should be offered back to the original shareholders first and at least give them a chance to recoup their losses

[mercier et camier] 25/4/2009 22:37

From The Sunday Times
April 26, 2009
Northern Rock to be sold by end of year
Iain Dey

NORTHERN ROCK is to be sold off by the end of the year under a fast-track government plan to start clawing back some of the hundreds of billions of pounds of taxpayers' money ploughed into the banking sector.

Advisers at Credit Suisse have started to draw up the sale plan, which is linked to moves to split the nationalised bank in two.

Potential buyers, including Virgin Money, National Australia Bank and Santander have been sounded out on a possible deal. The private-equity giants Blackstone and Towerbrook are also thought to be examining the opportunity.

The move would represent the government's first exit from its credit-crunch investments, which have also seen it take large stakes in Royal Bank of Scotland and Lloyds Banking Group.

Northern Rock's most toxic loans are to be siphoned off into a "bad bank" that will remain in government hands. Headhunters have been appointed to find a banker to run the bad-loan book on behalf of UKFI, the body that handles the government's investments.

The bank's £20 billion of customer savings and network of 70 branches will be put up for sale as soon as the split is complete.

Analysts estimate the "good bank" could be worth about £2 billion, roughly £1 billion less than the value of the equity pumped into the bank last summer through a debt-for-equity swap. Northern Rock also owes the Bank of England almost £15 billion for the emergency loans it received to stave off collapse.

In evidence to a judicial review into the bank's collapse last year, John Kingman, the civil servant who oversaw the nationalisation, revealed the government expected to lose about £1.3 billion on the deal.

In spite of the sizeable potential losses on a sale, it is understood that the Treasury is keen to prove to the voting public that there is an exit strategy for the numerous bank bailouts.

BARCLAYS is in the early stages of attempting to refinance its £20 billion exposure to bond insurers. The bank, which raised expensive capital from Middle Eastern investors to avoid accepting government cash, has opened talks with a number of large insurers over a possible deal.

[galleon] 01/4/2009 10:03

Miata - wish "God where here"!!! lol. still hoping!!

[bluenose851] 31/3/2009 17:40

So did u all get what u were owed (nothing) in the end or is this debacle still going on?

[frankiestheone] 29/3/2009 09:49

he obviously thinks the £ will sink further

[bryan2] 25/3/2009 11:22

Bank of England buys Corporate Bonds!

Yesterday the BoE spent billions buying French Telecom and American GE capital Corporate Bonds.
Apparently Mervyn King believes this will improve liquidity in the UK.
Did Mervyn not notice that with the £ at its lowest in years relative to $ and the euro that its a stupendously stupid thing to do?
We should not be surprised since the BoE sold its Gold at the bottom of the market losing the UK billions in the process.
Most people would think that buying UK corporate bonds such as BT,GLAXO,BP,United Utilities and the British Banks would have been a much better idea!
Its Britain's misfortune that in this time of crisis the BoE is led by such a slow witted incompetent jobsworth.

[ekuuleus] 23/3/2009 00:54

Agree regarding the competence. I guess they know that they have already lost the next election.

Anyway;

Appeal Filed

An appeal against the judgment in the judicial review on the compensation terms for shareholders in Northern Rock has been lodged. It is likely to be heard by the Appeal Court in June/July apparently.
NAO Inquiry
The National Audit Office (NAO) have published a report in the nationalisation of Northern Rock and it contains a number of criticisms. Apparently there was concern raised about the deficiencies of the Tripartite Authorities regime and how it could deal with major crises at banks as early as 2004, but the Treasury judged it was not a priority to fix the problems.

In addition Northern Rock wrote some £800million of "Together" mortgages which lent people as much as 125% of the value of their homes after the Government started funding the company. These mortgages have a higher default rate than others. Of course the Government did not have control of the company until after nationalisation so this is not totally surprising. However, we did point out at the time that one of the failings of the company and its management was not to tackle the financial structure of the business aggressively when the problems first arose. Instead the company got bogged down in the distraction of a "strategic review" and a new business plan was not formulated and execution commenced until after nationalisation took place. Many months were wasted in internal debates and conversations with third parties about what to do, instead of cutting mortgage lending and putting the company on a better financial basis.

[scribbler101] 22/3/2009 15:53

Eku - The reason I was sure NR would NOT be nationalised - or at least not without fair compensation - WAS the large and concentrated number of individual voters affected.

My mistake was the implication of competence in the present government.

[ekuuleus] 22/3/2009 03:19

its becoming apparent that the reason nrk was swiped is because a significant proportion of the shares were held by retail investors - the man in the street.

The other financial institutions have been bailed out because a higher proportion are held by financial institutions.

[greycioud] 19/3/2009 17:18

3 parts of 4/5 of SFA!!!

[onsider] 14/3/2009 21:33

Has anyone heard any news on how the compensation "calculations" are going?

Haven't seen anything in the news or the rags.

[bryan2] 12/3/2009 08:38

Mervyn stumbles along!
Bank of England creates £2bn of 'new' money

LONDON (ShareCast) - The Bank of England has successfully pumped almost £2bn of extra money into the financial system in the hope it will convince banks will lend more money.

A complicated 'reverse auction' process attracted offers from commercial banks to sell £10.5bn worth of gilts, or government bonds, to the central bank, of which a fraction under £2bn was accepted.
The idea is that it gets new money into the system and into the banks, which it hopes will then increase lending to cash-strapped companies and individuals.
There was disappointment earlier as the first of today's two auctions, conducted at midday and aimed at institutional investors such as pension funds, failed to attract any interest.

But the move has angered some. Ros Altmann, an independent policy adviser, explains that the plan to get the institutions selling gilts to invest the money in UK company debt instead, "is not going to happen!"
"Institutions will switch to overseas debt or top quality bonds, but will not put much into smaller companies who desperately need the funds," he says.
"Whoever is advising the government on this simply does not understand how institutional investors operate."
So the BoE issues new cash to buy BoE gilts.
This is supposed to help the wider economy!
What it does is decrease the annuity payout of pensions bases on gilt yield.
The money could have been better spent buying Corporate Bonds from say BT,Glaxo,Rolls Royce,United Utilities and solvent British Banks.
But what else do you expect from Mervyn who thinks the Liquidity crisis started in Oct 2008 when the rest of the planet knows it was before Aug 2007!

[sludgesurfer] 09/3/2009 00:20

He wasn't the only one:

coogar - 18 Feb'08 - 14:46 - 12156 of 14026


Well muppets, how does it feel having lost the lot just like I said you would?

If you'd sold last week you could invest in a couple of proper banks like BARC or LLOY, both of which will announce excellent results and an increase in their dividends this week.

Not only that but the likes of BARC & LLOY will now be able to pick up mortgages otherwise destined for NRK.

Quite a good result by any standards.

[frankiestheone] 06/3/2009 23:14

don't worry miata, now they are opening the swiss banks for all the tax dodgers, we're soon get it back

[kpwuk] 06/3/2009 10:17

Look on the bright side, the Chinese still execute for corruption.

[diydan] 06/3/2009 09:20

I see Peston is now off to China. Someone should warn them to through him out before his happy upbeat style of reporting makes a mess of their economy to. Then again they could just keep him and we may have a chance of getting through all this?

[bryan2] 04/3/2009 09:15

Brown in Denial

Darling has admitted that HMG/BoE has made several mistakes in the Government policies and response to the liquidity crisis.
Apparently this upset Brown who is on a mission to save the world.
He thinks that the world has a lot to learn about;
1. How to cause the first run on a high street bank in 150 years.
2. How Tripartite system helped near destruction of British Banking System.
3. How "help" for Banks cost them nearly 17% per annum after tax.
4. How to leak market sensitive information(Kingman and Peston) in such a way as to cause maximum damage to financial system.
Meanwhile today's results from Northern Rock show how HMG/BoE turns a liquidity problem into a self made disaster.
(Shareholders effectively lost control of Northern Rock in Aug 2007).

Northern Rock sees big jump in loan arrears

Date: Tuesday 03 Mar 2009

LONDON (ShareCast) - Repossessions and loans in arrears rose sharply last year at nationalised bank Northern Rock, while it also confirmed a loss of £1.36bn.

The bank had 3,620 repossessed homes on its books at the end of 2008 compared with 2,215 a year earlier, even though it has vowed not to take back a property until at least six months after a borrower defaults.

Loans in arrears also rose sharply to 17,264, up from 3,492 at the end of 2007. An equivalent 2.92% of its total mortgage book is now three months or more in arrears.

Northern Rock was one of the most aggressive lenders at the height of the housing boom. Its Together mortgages, which lent up to 125% of the value of a house, now make up 29% of its mortgage book after a policy of running down new lending last year to pay back the government led to the best customers leaving.

Arrears on Together mortgages are running at 4.5% - nearly three times the national average of 1.88%.

"Together customers on average have a higher loan-to-value and, therefore, in current market conditions, can find it more challenging to move their mortgage to another lender," Northern Rock said.

Northern Rock last year repaid £18bn of the £26.9bn lent to it by the Bank of England when it was rescued and as a result 100 senior managers will receive bonuses. The bank recently reversed its policy of running down its mortgage bank and will advance £5bn this year.
Customer deposits jumped to £19.6bn in 2008.

Included in Northern Rocks losses are;
1.400M£ for (unasked for) advice to HMG from Bankrupt American Banks (such as Citigroup) but charged to Northern Rock.
2.Several expensive changes in policy.
3. Redundancy costs
4. Charging the countries highest interest rates so as to slash mortgage book .

[miata] 04/3/2009 08:35

Northern Rock disclosed that Ann Godbehere, its recently departed finance director, received £173,000 on top of her annual £786,000 salary to fly to and from her home in Switzerland. This made her the highest paid director at Northern Rock with remuneration of £959,000.