Northern Rock plc chief executive has insisted that the bank is moving in the 'right trajectory' despite recording a six month loss of £140 million and seeing savers withdraw £2 billion of savings . After the nationalisation of Northern Rock, the bank was divided into a 'good' bank and a 'bad' bank, with Northern Rock plc, or the 'good' bank, taking on the existing savings accounts and mortgages, while Northern Rock Asset Management, the 'bad' bank, became responsible for the banks riskier investments .
The decreasing amount of bad loans allowed Northern Rock Asset Management to enjoy a return to profits in the first half of 2010, earning £349.7 million. Northern Rock plc, meanwhile, recorded a loss of £140 million over the same period, and with the government withdrawing its 100 per cent guarantee on all deposits, there was a hefty decline in retail deposits from £19.5 billion in January 1st to £17.6 billion on June 30th.
Chief Executive Gary Hoffman has refuted suggestions that the decrease in savings deposits is solely the result of the end of the government guarantee, instead citing the banks decision to remove its accounts with the best interest rates as a major factor.
Nationalised Bank Divisions Enjoy Mixed Fortunes
Financial Services > e-banking > Banking news
Nationalised Bank Divisions Enjoy Mixed Fortunes
Wed, 04 Aug 2010
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