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Monday
Aug232010

Offshore Business Closure and Loss of Savings Hits Northern Rock

Northern Rock has been through some tough times in the last few years.  During the recession I was watching closely when the bank was nationalised, and now we are seeing some more major events in its life cycle.

The government had put a 100% guarantee on savings held with Northern Rock.  But since that guarantee has been removed more than £2 billion worth of funds have been removed by customers.

This is not surprising, but it also does not tell the full story of the situation Northern Rock now finds itself in.  It has also closed down its offshore businesses, which again has had a notable effect on the situation.

You may read in the news about the good and bad parts of Northern Rock.  At present, the good part is Northern Rock plc.  This part has made a loss in recent months, whereas the bad part of the bank – Northern Rock Asset Management – has gone into the black.

We can see that this is a complex situation and perhaps it is this complexity and uncertainty that has led taxpayers to take their money out of the bank, now that it no longer has that 100% guarantee with it.  I am not surprised to see the losses it has incurred, because the last few months have seen some major changes.  People are necessarily going to protect their interests, and if that means moving their funds elsewhere they should do so.

If you wish to consult St Matthew about any aspect of your financial or tax situation, you may contact us at any time by using the link above.

 



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