Virgin to Buy Northern Rock

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Virgin to Buy Northern Rock

Post by Guest on Thu Nov 17, 2011 2:07 pm

Northern Rock To Be Sold To Virgin Money
35 Comments

10:33am UK, Thursday November 17, 2011

State-owned Northern Rock will be sold to Virgin Money for £747m, it has been revealed.
A statement released by HM Treasury says the Government will receive £747m upon the closing of the sale, with the potential in the future to receive more than £1bn in total.

Those figures are considerably less than the estimated £1.4bn injected into the bank during its period of public ownership.

But Chancellor George Osborne said the sale was "the best deal for the British taxpayer" in the current economic climate - a claim supported by many city analysts.


city editor: this isn't a bad deal for the taxpayer
The Treasury statement said Virgin Money had pledged as part of the deal to make no further compulsory redundancies, beyond those already announced, for at least three years.

The total number of branches will be retained and eventually expanded following the sale, the statement added, with Newcastle to become the group's operational base.

Mr Osborne said:"It was clear to us that this was the best deal for the British taxpayer, we were getting more money back than any other deal on the table.

"The sale of Northern Rock to Virgin Money is an important first step in getting the British taxpayer out of the business of owning banks.

"It represents value for money, will increase choice on the high street for customers and safeguards jobs in the North East."

Virgin Money chief executive Jayne-Anne Gadhia said the deal would create a "major new competitor" in the UK retail banking sector.

She added: "The two businesses complement each other well and together they will create a strong bank with over four million customers."

The acquisition includes 75 branches and 2,100 staff, one million customers, a £14bn mortgage book and retail deposits worth £16bn.

Sky News' City editor Mark Kleinman said: "This is probably a better price than we expected.

"If you compare the price that Virgin Money is paying... to where the share prices of the big UK banks like Barclays and Royal Bank of Scotland are trading at the moment, Richard Branson is actually paying a higher proportionate value for Northern Rock.

"That's why the Chancellor will be able to say today that this is a relatively good deal for the British taxpayer at a time of absolute turmoil in the European banking sector."

Virgin Money, which was founded in 1995, has around three million customers.

Under the terms of the deal, the Government will receive £747m on completion and a further £50m within six months.

An additional £150m will be realised in the form of a financial instrument, while up to £80m will be paid if the business is sold or floated in the next five years.

The sale excludes Northern Rock Asset Management, which remains under Government ownership and holds a book of residential mortgages and unsecured loans.

http://news.sky.com/home/business/article/16112201

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Re: Virgin to Buy Northern Rock

Post by Guest on Thu Nov 17, 2011 3:01 pm

Quelle surprise ! Suspect

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Re: Virgin to Buy Northern Rock

Post by Guest on Thu Nov 17, 2011 4:52 pm

I wonder why I, as a taxpayer feel short changed. Am I the only one?.

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Re: Virgin to Buy Northern Rock

Post by Guest on Thu Nov 17, 2011 4:54 pm

fred bloggs wrote:I wonder why I, as a taxpayer feel short changed. Am I the only one?.

No you are not! I don't care if the pundits think this is a good deal, we should have got a profit for our money, not a loss!!!!

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Re: Virgin to Buy Northern Rock

Post by Guest on Thu Nov 17, 2011 5:09 pm

Nice to see that the Billionaire Richard Branson is paying just HALF what it cost the UK Taxpayer! Rolling Eyes

I'm sure he'll be glad of the subsidy! Twisted Evil Rolling Eyes

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Re: Virgin to Buy Northern Rock

Post by Guest on Thu Nov 17, 2011 8:43 pm

Northern Rock was bailed out for purely party political reasons. The rest because they had to.
Northern Rock was extremely exposed to the sub prime problem indeed it was part of it. Despite the taxpayers investment this might be on balance a good deal or at least the least worst option.
You are sounding more and more the envious Socialist every day Doodles,"I'm sure the Billionaire etc etc". Again I repeat the BNP are not good for you, a horrible mixture of far right policies with far left economic ones.

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Re: Virgin to Buy Northern Rock

Post by Guest on Thu Nov 17, 2011 9:30 pm

So the money Branson is paying 75% goes to the government yes?

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Re: Virgin to Buy Northern Rock

Post by Guest on Thu Nov 17, 2011 9:35 pm

Nems Again wrote:So the money Branson is paying 75% goes to the government yes?

It says he is paying £747 million and £747 million is going to the government on completion, with a further £50 mill after, WITH THE POTENTAL (not secure) for another Billion.

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Re: Virgin to Buy Northern Rock

Post by Guest on Thu Nov 17, 2011 10:45 pm

sassy1261 wrote:

It says he is paying £747 million and £747 million is going to the government on completion, with a further £50 mill after, WITH THE POTENTAL (not secure) for another Billion.

blimey!

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Re: Virgin to Buy Northern Rock

Post by Guest on Thu Nov 17, 2011 10:57 pm

Nems Again wrote:

blimey!

No wonder Kate Winslett likes his son!

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Re: Virgin to Buy Northern Rock

Post by Guest on Thu Nov 17, 2011 11:03 pm

At its peak, the taxpayer loan to the bank totalled nearly £27bn. Following a restructuring last year, Northern Rock was split into "good bank" Northern Rock Plc, and "bad bank" Northern Rock Asset Management (NRAM).


Guess which one the Taxpayer still 'owns'.... Evil or Very Mad
NRAM, which holds the lender's toxic assets, still has a state loan worth close to £21bn

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Re: Virgin to Buy Northern Rock

Post by Guest on Thu Nov 17, 2011 11:09 pm

Angel wrote:At its peak, the taxpayer loan to the bank totalled nearly £27bn. Following a restructuring last year, Northern Rock was split into "good bank" Northern Rock Plc, and "bad bank" Northern Rock Asset Management (NRAM).


Guess which one the Taxpayer still 'owns'.... Evil or Very Mad
NRAM, which holds the lender's toxic assets, still has a state loan worth close to £21bn

Oui Missus, when did you turn into the economist, well done that girl. Don't you dare tell me you ain't as bright as a button. That was conveniently overlooked in to blurb wasn't it!

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Re: Virgin to Buy Northern Rock

Post by Guest on Mon Nov 21, 2011 8:09 pm

Update the last govt got permission from Brussles to nationalise it on condition it was sold by 2013. The longer that decision is left unmade the shorter the price.

Another legacy of Labour not the coalition as was the carve up.

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