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Northern Rock
 | This article needs additional citations for verification. (July 2024) |
 | |
| Company type | Plc |
|---|---|
| Industry | Bank |
| Founded | 1850 (Northern Counties) 1865 (Rock) 1965 (merger, as Northern Rock) |
| Defunct | 12 October 2012 |
| Fate | Sold to Virgin Money and as of 1 October 2024 part of Nationwide Building Society |
| Headquarters | Northern Rock House, Gosforth, Newcastle upon Tyne , England, UK |
Number of locations | 75 branches (2011) |
Area served | UK (formerly operated in Denmark, Ireland, Guernsey) |
Key people |
|
| Services | Banking, Mortgages |
| Revenue | £5 billion (2006) |
| £627 million (2006) | |
| £443 million (2006) | |
Number of employees | ~6000 (2007)[1] |
| Parent | Virgin Money UK |
Northern Rock, formerly the Northern Rock Building Society, was a British bank. Based at Regent Centre in Newcastle upon Tyne, United Kingdom, Northern Rock was originally a building society. It demutualised and became Northern Rock bank in 1997, when it floated on the London Stock Exchange with the ticker symbol NRK.
During the early 2000s the company borrowed substantially to fund mortgages, with the aim of ambitious growth, and also donated large amounts to charitable purposes and communities directly and through sponsorships. The global banking crisis beginning around 2007–08 meant that it was unable to produce income as expected from its loans, and was at risk of being unable to repay the amounts it had borrowed. The news that the bank had approached the government for support with its liquidity led within 24 hours to a public lack of confidence and concerns that savings were at risk,[2] and the bank failed following a bank run as people rushed to withdraw their savings. It was the first British bank in 150 years to fail due to a bank run.[3]
Unable to find a commercial buyer or secure the further government support needed, it was taken into public ownership in 2008, as an alternative to insolvency. By that point the government had extended liquidity support of tens of billions of pounds to Northern Rock. An inquiry concluded that the board had failed to properly protect the bank from the risks inherent in its strategy, or to restrain the executive directors where required, therefore although the bank had sufficient assets, it had become vulnerable.
The branch operations were eventually returned to private ownership when the branches and other retail operations were acquired by Virgin Group in 2012, being rebranded as Virgin Money the same year. The mortgage book of higher risk assets was renamed Northern Rock (Asset Management) and later "NRAM plc",[4] and remained in public ownership until it was sold to Cerberus Capital Management in 2016.[5]
As of May 2024[update] the Northern Rock Shareholder Action Group are continuing their campaign to obtain compensation for the shares that were taken over by the Government when the bank was nationalised during the 2007–2008 financial crisis.[6]
- ^ "Northern Rock confirms jobs cuts". BBC News. 29 August 2008. Retrieved 16 September 2008.
- ^ "Bank bailout 'should have been secret'". BBC News. 11 September 2017.
- ^ Cite error: The named reference
Springer080115was invoked but never defined (see the help page). - ^ "Northern Rock split date is set". BBC News. 8 December 2009. Retrieved 19 December 2009.
- ^ Ping Chan, Szu; Wallace, Tim (13 November 2015). "Government sells £13bn of former Northern Rock mortgages to US private equity firm". The Telegraph. Retrieved 13 November 2015.
- ^ "TSC Appeal". Northern Rock Shareholder Action Group. Retrieved 17 May 2024.
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