Rock may manage £40bn mortgage book
FRESH speculation has erupted over Northern Rock amid reports that ministers could ask the bank to manage mortgage book assets from the Bradford & Bingley as part of a rescue package.
The Government’s talks on saving the West Yorkshire bank from collapse include the option of nationalising the company as with Northern Rock in February this year.
Parts of Bradford and Bingley could then be sold off relatively quickly, but the firm’s £40bn mortgage book may be owned by taxpayers on a long-term basis.
Another option reportedly on the table is that good quality mortgages at Northern Rock – where new chief executive Gary Hoffman starts work on Wednesday – could be handed to any buyer of Bradford and Bingley as an incentive, leaving the Rock as a publicly-owned bank taking on unwanted debts from British lenders.
Conservatives meeting at the party’s conference in Birmingham yesterday expressed their concerns about a potential Bradford & Bingley link with Northern Rock.
Euro-MP Martin Callanan said: “I wouldn’t like to see Northern Rock disadvantaged by whatever they do and never forget we are still waiting for the results of the investigation by the European Commission into state aid for Northern Rock.
“And presumably if Bradford and Bingley was rolled into Northern Rock, that would make it even more difficult to win approval. We are already facing huge job cuts in the North East and potentially this could make the situation even worse.”
Nick Brown, Minister for the North East, said: “Northern Rock’s recovery plan is on track.
“This is good news and it reflects the hard work and focus that the management team have brought since nationalisation. It is still the Government’s intention to return it to the private sector.”
A Northern Rock spokesman said: “We never comment on market rumour and speculation.”