Lender rules out N Rock bid

19-12-2007

Lender rules out N Rock bid
Bradford and Bingley says it is not in talks to acquire any part of stricken bank Northern Rock.

The UK's biggest buy-to-let lender was responding to reports that it was interested in buying Northern Rock's mortgage assets.

"Bradford and Bingley was one of several parties that received a copy of the Northern Rock briefing memorandum," a spokeswoman said.

"We are not actively pursuing a bid for any part of Northern Rock at this time."

Yesterday the Treasury said it was extending its financial guarantees to the Newcastle-based bank, effectively meaning that £57 billion of taxpayers' money is tied up on covering losses incurred by financial institutions granting loans to Northern Rock.

Only two suitors have emerged in the bid to take over Northern Rock, investment firm Olivant and Sir Richard Branson's Virgin Group.

If neither group succeeds with a rescue package however, Northern Rock faces nationalisation or an eventual breakup.

The bank invited offers after it found itself at the centre of the first run on a British bank in almost 150 years in September, when it was forced to turn to the Bank of England for an emergency loan.

Chancellor Alistair Darling was forced to confirm the government would guarantee the savings of Northern Rock customers in response to the crisis, which occurred after the lender was unable to raise sufficient funds on the wholesale money markets due to the global credit crunch.

It has since borrowed further government-backed cash from the Bank of England, leading to concerns about the extent to which the taxpayer is exposed to Northern Rock's problems.

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