Feeds

UK Treasury flogs Northern Rock to flirty Virgin

Nationalised bank offloaded in £747m cash deal

The essential guide to IT transformation

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. ®

5 things you didn’t know about cloud backup

More from The Register

next story
Munich considers dumping Linux for ... GULP ... Windows!
Give a penguinista a hug, the Outlook's not good for open source's poster child
UK fuzz want PINCODES on ALL mobile phones
Met Police calls for mandatory passwords on all new mobes
e-Borders fiasco: Brits stung for £224m after US IT giant sues UK govt
Defeat to Raytheon branded 'catastrophic result'
EU justice chief blasts Google on 'right to be forgotten'
Don't pretend it's a freedom of speech issue – interim commish
Detroit losing MILLIONS because it buys CHEAP BATTERIES – report
Man at hardware store was right: name brands DO last longer
Snowden on NSA's MonsterMind TERROR: It may trigger cyberwar
Plus: Syria's internet going down? That was a US cock-up
UK government accused of hiding TRUTH about Universal Credit fiasco
'Reset rating keeps secrets on one-dole-to-rule-them-all plan', say MPs
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Yes, but what are your plans if a DRAGON attacks?
Local UK gov outs most ridiculous FoI requests...
prev story

Whitepapers

5 things you didn’t know about cloud backup
IT departments are embracing cloud backup, but there’s a lot you need to know before choosing a service provider. Learn all the critical things you need to know.
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.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.