RNS Number : 1165J
Northern Rock (Asset Management)
24 March 2010
Northern Rock (Asset Management) plc: Company Announcement
· Board recommends integration of NR(AM) and B&B
· Next step in complete separation of restructured Northern Rock business
Following the announcement made today by UKFI, the Board of Northern Rock (Asset Management) plc ("NR(AM)") confirms that it has recommended the integration of NR(AM) and Bradford & Bingley plc ("B&B").
This follows discussions between UKFI and the management teams of NR(AM) and B&B to explore options for how the two companies could work together. The intended integration of the two companies will be an extensive process. Full details are not yet established and a firm timescale cannot yet be confirmed.
The intention is to create a single holding company that will own NR(AM) and B&B under common governance and management with the aim of maximising value for taxpayers. There are no immediate changes for customers and they do not need to take any action. Each company will remain as a separate legal entity, with its own distinct balance sheet, liabilities and government support arrangements.
The proposal will be implemented within EC State Aid rules and will be subject to regulatory approval from the FSA.
Commenting on today's announcement, Gary Hoffman, CEO of Northern Rock (Asset Management) plc said:
"This is the next step on the journey for Northern Rock (Asset Management). We are pleased to have reached agreement with UKFI and Bradford & Bingley as to how we can move forward together, to deliver maximum value for the taxpayer. It also represents an important step towards complete separation of the Northern Rock business, following the legal and capital restructure on 1 January. We are continuing to make good progress against our overall business plan."
Notes to Editors:
The legal and capital restructure of the former Northern Rock was successfully completed on 1 January 2010, following approval for State aid which was granted by the European Commission on 28 October 2009. This resulted in the creation of two separate companies, Northern Rock (Asset Management) plc and Northern Rock plc.
Northern Rock (Asset Management) plc - holds approximately £50 billion of residential mortgages and unsecured loans of £3.9 billion. Northern Rock (Asset Management) plc holds the Government loan plus Northern Rock's non-deposit wholesale and secured funding instruments. Northern Rock (Asset Management) plc does not hold any retail deposits and does not offer any new mortgage lending.
Northern Rock plc - a savings and mortgage bank that holds and services all customer savings accounts (balances approximately £19 billion) and approximately £10 billion of mortgages. The new bank is regulated as a deposit taker and mortgage lender by the FSA. It offers new savings products and new mortgage lending to increase mortgage supply and help sustain a competitive market. Northern Rock plc also holds certain wholesale deposits.
Northern Rock plc, the new bank created by the legal and capital restructure on 1 January 2010, does not form part of the proposal outlined above.
This document contains certain forward-looking statements with respect to the plans and objectives of Northern Rock (Asset Management) plc, its current goals and expectations relating to its future financial condition and performance and the future operations of its business.
Forward-looking statements are sometimes, but not always, identified by the use of a date in the future or by such words as "anticipates", "aims", "due", "could", "may", "should", "expects", "believes", "intends", "plans", "potential", "reasonably possible", "targets", "goal" or "estimates" (although their absence does not mean that a statement is not forward looking). By their nature, forward-looking statements are unpredictable and involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Northern Rock (Asset Management) plc's actual future results or developments may differ materially from the results and developments expressed or implied in these forward-looking statements as a result of a variety of factors, including (but not limited to) UK domestic and global economic and business conditions, market related risks such as interest rate and exchange rate volatility, delays in implementing proposals, difficulties with computer systems, legislative, fiscal, competition and regulatory developments and changes, the impact of any legal or other proceedings against Northern Rock (Asset Management) plc, changes in customer preferences and other factors.
All forward-looking statements in this announcement are based on information available to Northern Rock (Asset Management) plc as of the date hereof. All written or oral forward-looking statements attributable to Northern Rock (Asset Management) plc or any person acting on behalf of Northern Rock (Asset Management) plc are expressly qualified in their entirety by the foregoing.
Other than in accordance with its legal or regulatory obligations, neither Northern Rock (Asset Management) plc nor anyone acting on its behalf undertakes any obligation to update or revise any forward looking statement, whether as a result of new information, future events or otherwise.
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