Rock can be grateful it fell early in crunch

Oct 8 2008 by Andrew Hebden, The Journal

BROADCASTER Nick Owen, hosting yesterday’s annual meeting of regional development agency One NorthEast, remarked that it was a relief to get away from London and come to somewhere a bit more “stable”.

How things have changed. It doesn’t seem long since the North East seemed to find itself at the fulcrum of every crisis that unfolded – be it economic, sporting or political.

And who would have thought that Mr Owen was about to introduce Ron Sandler, executive chairman of Northern Rock, the bank which for so long was shorthand for the credit crunch.

The tone of Mr Sandler’s address yesterday was carefully chosen.

While the message he wanted to convey was undoubtedly positive, he is only too well aware that things can change very quickly in the current financial climate.

He was also conscious of the backdrop to his address – the revelation that the bosses of the UK’s biggest banks had held talks with Chancellor Alistair Darling over a dramatic funding arrangement.

He can hardly be seen to be too triumphant in such circumstances, even if he is undoubtedly pleased with what has been achieved in the last eight months.

But it was telling that he felt able to take to the podium and speak in such glowing terms of the welcome he had received from North East people, and the unreserved support he had received for his efforts to save the Rock.

There are now reasons to be grateful for the fact that the Rock found itself at the vanguard of this crisis.

One need only look at the nationalisation of the Bradford & Bingley to see what might have happened had the Rock fallen in the current climate. The chances of the B&B name remaining – or the majority of its staff keeping their jobs – appears slim indeed.

Nationalisation and restructuring has been a painful process for the Rock. But it might just be through the worst of it and, as Mr Sandler said yesterday, be a “fair distance down the road to redemption”.