LONDON (ShareCast) - Investment bankers examining ways to return Northern Rock (LSE: GB0001452795.L - news) to private
ownership say the nationalised bank should be split into two separate businesses, reports today suggest.
According to the Times (1832.HK - news) , the Treasury could try selling the retail business separately from Northern Rock's £66.7bn mortgage book.
The Treasury has been told to look at ways to divest the government's 100% stake, which could also involve a listing, a trade sale to another financial group or a remutualisation.
The Times reported yesterday that the government is eager to sell Northern Rock to the private sector at a profit to prove to voters that prime minister Gordon Brown has overcome the financial crisis.
The story emerged just as a group of disgruntled former Rock shareholders renewed their case for compensation at the High Court. They claim that current government compensation plans will leave their original shares worthless.
Lawyers for shareholder groups claim that by nationalising the bank without adequate compensation, it was a breach of human rights and recompense should be based on the value of the bank. A previous ruling, however, judged that without government support Northern Rock would have gone bust.
Northern Rock received £27bn emergency funds to keep going in September 2007, but has since repaid two-thirds of that.
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
