biotechpete Posted March 2, 2012 Share Posted March 2, 2012 The country will eventually make £9-11 billion PROFIT on the bailouts of Northern Rock and Bradford & Bingley. Profits doubled this year to £2.1 bn after a fall in bad debts. This more than wipes out last years last years £500 million loss on the sale of Northern Rock to Virgin and suggests that the economy might be slowly turning around. Does this mean the chancellor got it right and is doing a good job? http://www.guardian.co.uk/business/2012/mar/02/northern-rock-bad-bank-taxpayer-profits Link to comment Share on other sites More sharing options...
Womerry2 Posted March 2, 2012 Share Posted March 2, 2012 Or does it mean the previous chancellor got it right? (I'm asking seriously. I realise it reads like a party political point scorer, but that is not what I mean.) Link to comment Share on other sites More sharing options...
biotechpete Posted March 2, 2012 Author Share Posted March 2, 2012 I was wondering that too, there were plenty of people saying what a bad deal it was when it was sold, me included. I guess bailing out Northern Rock was a bit of different proposition from bailing out the likes of RBS. As I recall they had a lot of mortgages which meant they couldn't get a quick return on their cash, hence the liquidity problem. It's also good that fewer of their debts are going bad, suggesting that we are returning to a more stable economic situation (for now at least). Either way it's good news for the deficit even if it'll only make a slight dent. Link to comment Share on other sites More sharing options...
brianthedog Posted March 2, 2012 Share Posted March 2, 2012 Let's not forget Peston acted hugely irresponsibly with regards to Northern Rock - the BBC should be addressing his scare-mongering. Link to comment Share on other sites More sharing options...
vinyl Posted March 2, 2012 Share Posted March 2, 2012 I don't want to throw any cold water on folks joy here but I'm not convinced that we have much cause for celebration. The government forked out £36.8 billion for Northern Rock. Whilst making £9 billion is always better than losing £ 9 billion you need to temper this against waiting 15 years to obtain that return. The £36.8 billion has already been tied up for 3 1/2 years, so in 15 years that will be 18 1/2 years. I'm not sure exactly what inflation is running at but I suspect that 46 billion of 2027 pounds will be worth considerably less than 36.8 billion of 2008 pounds. Link to comment Share on other sites More sharing options...
Jeffrey Shaw Posted March 5, 2012 Share Posted March 5, 2012 The 'bad bank' in question is Northern Rock (Asset Management) plc. In fact, this IS the original Northern Rock plc after a name change; same co. reg. no., you see. What's latterly been called Northern Rock plc was the spin-off and is being (or has been) bought by Virgin Money. Link to comment Share on other sites More sharing options...
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