Britain explores sale of Northern Rock: Report
The British government is mulling the sale of nationalised bank Northern Rock later this year, The Times newspaper reported on Wednesday citing Treasury sources.Updated: Jun 10, 2009, 15:13 IST
The British government is mulling the sale of nationalised bank Northern Rock later this year, The Times newspaper reported on Wednesday citing Treasury sources.
The powerful Treasury department has instructed investment banking advisers to examine a possible sale in the autumn, the paper said.
Northern Rock, based in the northeastern English city of Newcastle, was taken into public ownership last year after it ran into severe funding problems because of the international credit crunch.
The Treasury wants to establish whether it should float the lender back onto the stock market, sell the bank to another financial institution, or convert it back into a building society or mutual, according to The Times.
Building societies specialise in home loans, are owned by their members and are not listed on the stock exchange.
The Times added that government ministers were cautious of selling the bank in the short term because they wanted to make the best return on their investment.
Northern Rock, once Britain's fifth-biggest home loan provider, faced potential collapse in September 2007 as banks tightened lending criteria amid uncertainty over exposure to the collapsed US subprime home loan sector.
The troubled group was forced to request emergency funding from the Bank of England -- which sparked the first run on a British bank for more than a century.