Banking shake up: Northern Rock to be sold to a single buyer

15th June 2011

The BBC News website reported that the UK Chancellor George Osborne will sell the nationalised bank Northern Rock to a single buyer.

It reported that Osborne has been advised he will make the most money by selling it in one go.

As reported on Mindful Money earlier the Chancellor is also expected to announce that banks should ring-fence retail from investment banking.

The decision follows the central recommendation of Sir John Vickers' Independent Commission on Banking.

The auction of Northern Rock is expected to raise about £1bn, which is less than the £1.4bn the government has spent propping up the bank.

The sale of the former mutual will involve that of its "good bank", which contains customers' savings and about 70 branches, while the "bad bank" conta will continue to be owned by the Treasury.

However, shadow chancellor Ed Balls called for Northern Rock to be mutualised rather than sold off, and accused Mr Osborne of failing to give the option serious consideration.

On  Wall Street Journal blog The Source writer Sara Munoz said the sale could pave the way for a planned sell off "signals that the UK government is trying to pave the way for investors to buy out the Government's stakes in Lloyds and RBS".

To receive our free weekly email sign up here

Leave a Reply

Your email address will not be published. Required fields are marked *