View more on these topics

Virgin Money buys Northern Rock

Northern Rock has been sold to Richard Branson’s Virgin Money in a deal worth £747m, which could rise to more than £1bn.

The company will be entirely rebranded to Virgin Money but there will be no change to its intermediary operations.

The Treasury says the sale was in the best interests of the taxpayer, secures the long-term future of the company and will increase competition in the banking sector. It does not include “bad bank” Northern Rock Asset Management.

Chancellor George Osborne says: “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.

“It represents value for money; will increase choice on the high street for customers; and safeguards jobs in the North East.”

According to the Treasury, Virgin Money has agreed to make no further compulsory redundancies, besides those already announced, for at least three years from completion of the deal.
The new owners will retain and expand the total number of branches, extend support for the Northern Rock charitable foundation for another year, and make Newcastle its operational headquarters.

Ron Sandler, executive chairman of Northern Rock, says: “The return of Northern Rock to the private sector has always been one of our key objectives.
“We said that this would be done at the right time and when there was a proposition in the best interests of taxpayers and other stakeholders.”

The government says the sale will not affect current customers of Northern Rock.

The Treasury expects around £50m of cash within six months of completion of the deal.

According to the terms of the deal, a further £150m will be paid in a capital instrument and an additional cash consideration of £50-80m could be paid upon a future profitable initial public offering or sale in the next five years.

Recommended

Valuations are up 61% year-on-year

The number of residential valuations conducted in October rose 61% compared with the same period last year, according to Connells Survey and Valuation’s latest housing market activity report. The number of valuations in October fell by 17% compared with September, but this is lower than the average drop of 24% usually seen between these two […]

FirstBuy builders push own brokers on clients

Concerns are growing that house builders are breaching FirstBuy guidelines by forcing borrowers to choose from a restricted panel of brokers. Developers claim that FirstBuy borrowers are free to use brokers and solicitors outside their recommended panels, but their terms and conditions, and anecdotal evidence suggest otherwise. A spokeswoman for Taylor Wimpey says: “We encourage […]

The Mortgage Mole

Running battle Witnesses report that there was a titanic battle of wills at the New York Marathon on November 6 as Nigel Stockton, financial services director at Countrywide, battled to beat his boss Grenville Turner, the chief executive.

Iain Chadwick

The Budget 2015: a brief overview

Following George Osborne’s delivery of his sixth Budget as chancellor and the last of this current parliament, we have provided a brief overview of the initiatives put forward in his statement, focusing on the topics that have an impact upon the pensions landscape, savings, personal taxation and businesses.

Newsletter

News and expert analysis straight to your inbox

Sign up
Comments
  • Post a comment
  • Tom Cleary 18th November 2011 at 10:03 am

    This could be good news for mortgage brokers or it could be bad news? Northern Rock are heavily reliant upon intermediary business. Virgin are not. Which way will they go with this new entity? Are we keeping a lender or losing one?…

  • J M D 17th November 2011 at 1:05 pm

    They say all things financial are like a ‘money go round’. If the Labour Government had allowed Virgin to take over N Rock 4 years ago instead of us Taxpayers and the subsequent run on the Bank and spiralling out of control financial band waggon affecting ALL Banks. The outcome for ALL of us would now be very different now ???

  • Anonymous 17th November 2011 at 11:16 am

    I think this fantastic news. I think its a step in the right direction and just what is needed to start pulling everything in the right direction. I think the time has come to start thinking positively instead of negatively for a change! Great news so far as Im concerned!

  • Kevin Vella 17th November 2011 at 11:06 am

    should we brace ourselves for another indian based call centre …..

  • simon bucknell 17th November 2011 at 10:40 am

    on the face of it there are certain parallels between waiting for a virgin train (thats delayed) and waiting for a northern rock mortgage offer….

  • Jaz 17th November 2011 at 10:11 am

    A JUMBO price? (747?)