DCSIMG

NBNK joins Northern Rock auction

THE aspiring new banking venture NBNK has submitted a bid proposal for nationalised Northern Rock, sources claimed last night, putting NBNK in a head-to-head with Virgin Money.

The bid comes days after UK Financial Investments, which manages taxpayers’ stakes in state-owned banks, lifted a ban preventing NBNK’s chief executive, Gary Hoffman, who was formerly head of Northern Rock, from leading a bid.

NBNK is also bidding for 632 bank branches and other assets that Lloyds has been ordered to dispose of by regulators as payback for being rescued by the UK government during the credit crisis.

It is understood that NBNK would look to combine Northern Rock with those branches to form a new challenger bank to take on the “big four” of Barclays, HSBC and part-nationalised lenders Royal Bank of Scotland and Lloyds, which dominate British banking.

NBNK’s bid came a day after Virgin Money, part of billionaire Sir Richard Branson’s Virgin Group, submitted its second-round bid for Northern Rock. The auction and Lloyds branch sale have end-of-year deadlines approaching, and both deals have encountered a certain amount of difficulty due to financial market turmoil.

The global economic slowdown and market volatility has hit the valuation of both auctions, meaning the sales might not fetch as much money as once hoped for. Lloyds has kept open the option of spinning off or floating its branches if it fails to agree a sale.

NBNK has been competing with Co-Operative Financial Services and Sun Capital for the Lloyds branches, although NBNK is the only one to have submitted a second-round bid.

l Royal Bank of Scotland chief executive Stephen Hester said last night that he hoped to start selling the insurance business in the second half of next year.

 

Comments

 
 

Back to the top of the page