Northern Rock

[Cricko]

Northern Rock has been sold by the government to Virgin for a 650 Million pound loss on what they paid for it.

Another shot up the arse for taxpayers.

http://www.bbc.co.uk/news/business-15769886

"Perhaps they will call it Northern Virgin".

 

[Yorkshire Blue]

A shot in the arm or shooting yourself in the foot?

 

[Pubey]

A shot in the arm or shooting yourself in the foot?

A shot in the foot (Amy Winehouse style)

 

[canveyshrimper]

...and I thought this thread was going to be about those famous Northern rockers Smokie. :sad:

 

[Crabby Shrimper]

Northern Rock has been sold by the government to Virgin for a 650 Million pound loss on what they paid for it.

Another shot up the arse for taxpayers.

http://www.bbc.co.uk/news/business-15769886

"Perhaps they will call it Northern Virgin".

Had it been bought as an investment then yes, but as I understood it (and finance isn't my strong point) the money paid "for" was actually a bail out and therefore probably far more than the market value. I'm guessing that although the direct loss is between £400m and £650m, if one factors in the loss of public confidence in the banking system that would've come from a failure, then the deal doesn't seem anywhere near as bad.

Yes, i know people are hardly confident in the banking sector at the moment, but had there been no bail out I feel it could well have been a lot worse. Hopefully one of our more economically savvy posters could confirm, or refute this?

 

[Cricko]

Had it been bought as an investment then yes, but as I understood it (and finance isn't my strong point) the money paid "for" was actually a bail out and therefore probably far more than the market value. I'm guessing that although the direct loss is between £400m and £650m, if one factors in the loss of public confidence in the banking system that would've come from a failure, then the deal doesn't seem anywhere near as bad.

Yes, i know people are hardly confident in the banking sector at the moment, but had there been no bail out I feel it could well have been a lot worse. Hopefully one of our more economically savvy posters could confirm, or refute this?

Virgin offered 1.1 billion for Northern Rock at the same time as the Government took it over...they turned down the offer then.

 

[Neil_F]

They hsould have allowed it to go through originally. Northern Rock has made a loss every year since 2008 I think so waiting any longer would start to erode even more capital. The whole thing was a total mess from start to finish but at least it hasn't been swallowed up by an existing bank, thus reducing competition further.

The financial sector needs some new blood without legacy assets that can add some competition and introduce some (hopefully) new practices.

 

[Crabby Shrimper]

Virgin offered 1.1 billion for Northern Rock at the same time as the Government took it over...they turned down the offer then.

Should point out though, that was a different Government. Is it a shot up the arse, or a loss cutting exercise?

 

[blues_r_best]

Just add the difference to the debt owed by the still state owned part of Northern Rock.