Northern Rock hits new low
SHARES in Northern Rock today slumped to a new record low as it marked its 10th anniversary as a publicly-listed company.
Fresh fears the lender could be sold off at a bargain price saw the group’s shares shed more than 26% of their value to close at 132.1p yesterday valuing the group at about £556m.
Thornaby Stockbrokers Wise Speke said Northern Rock’s share price had fallen further in early trading - down just over 5p at 127p.
The recent slump came as analysts’ predicted the company would swing into a loss next year.
The Newcastle-based group has seen its share price collapse from 639p, which valued it at £2.7bn on September 13 - the day before it revealed it had been forced to turn to the Bank of England for emergency funding.
The move sparked an unprecedented run on the mortgage specialist, which led to the Government stepping in to guarantee customers’ deposits in a move to calm savers.
Northern Rock has reportedly borrowed nearly £8bn from the Bank as it struggled amid soaring borrowing costs in the money markets.
The company’s stock market woes came as Prime Minister Gordon Brown and Chancellor Alistair Darling unveiled reforms to protect savers in the event of a banking collapse.
Mr Darling announced a new regime guaranteeing an individual’s bank and building society savings up to £35,000. Previously only the first £2,000 of savings and 90% of the next £33,000 were guaranteed.
