Feeds

UK Treasury flogs Northern Rock to flirty Virgin

Nationalised bank offloaded in £747m cash deal

5 things you didn’t know about cloud backup

Northern Rock was a major victim of 2008's credit crunch - but it survived with help from the then Labour government, which nationalised the Newcastle-based money outfit. Now the Tory-LibDem coalition is shoving it back into the corporate world.

Step forward bearded biz baron Sir Richard Branson, whose Virgin Money company has agreed a cash deal of £747m to take Northern Rock away from the command of taxpayers the Treasury.

"The sale of Northern Rock to Virgin Money is an important first step in getting the British taxpayer out of the business of owning banks," thundered thin-lipped Chancellor of Exchequer George Osborne.

"It represents value for money, will increase choice on the high street for customers, and safeguards jobs in the North East,” he added.

As part of the agreement, Virgin Money is not expected to make any compulsory redundancies for three years beyond the sackings already announced by Northern Rock. The deal also means Virgin Money will plonk its HQ in Newcastle.

As for the £50bn owed to taxpayers, who bailed out Northern Rock, the government assures us that the debt will continue to be repaid: this financial chicanery will be managed by the rather blandly named UK Asset Resolution Ltd. On top of the £747m deal, at least an extra £250m is promised to the government once the sale is done and dusted.

Terms and conditions for existing customers of the bank will remain the same, the government added.

In October 2007, Branson's Virgin Group was in talks to purchase Northern Rock after it was bailed out by the Bank of England. But that bid never materialised into a buyout. Instead Northern Rock was nationalised.

The Bank of England Governor Mervyn King blamed the 2008 Northern Rock crisis, which prompted the first cash run on a UK bank for more than 140 years, on then-chancellor Alistair Darling for failing to support a takeover bid. ®

The essential guide to IT transformation

More from The Register

next story
Britain's housing crisis: What are we going to do about it?
Rent control: Better than bombs at destroying housing
Top beak: UK privacy law may be reconsidered because of social media
Rise of Twitter etc creates 'enormous challenges'
GCHQ protesters stick it to British spooks ... by drinking urine
Activists told NOT to snap pics of staff at the concrete doughnut
What do you mean, I have to POST a PHYSICAL CHEQUE to get my gun licence?
Stop bitching about firearms fees - we need computerisation
Ex US cybersecurity czar guilty in child sex abuse website case
Health and Human Services IT security chief headed online to share vile images
We need less U.S. in our WWW – Euro digital chief Steelie Neelie
EC moves to shift status quo at Internet Governance Forum
Oz biz regulator discovers shared servers in EPIC FACEPALM
'Not aware' that one IP can hold more than one Website
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Advanced data protection for your virtualized environments
Find a natural fit for optimizing protection for the often resource-constrained data protection process found in virtual environments.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.