Northern Rock asks for Bank help

[Craig 6670]

Looks like our main sponsor are having difficulties....

 

One of the UK's largest mortgage lenders, the Northern Rock, is applying to the Bank of England for emergency financial support, the BBC has learned.

However this does not mean that the bank is in danger of going bust, the BBC Business Editor Robert Peston says.

 

There was no reason for people with Northern Rock savings accounts to panic, he added.

 

The bank has struggled to raise money to finance its lending ever since money markets seized up over the summer.

 

The decision for the Bank of England to become the "lender of last resort" comes after consultation with the Treasury and the Financial Services Authority.

 

However the disclosure is expected to rock financial markets, Mr Peston said.

 

"Although the firm remains profitable, the fact that it has had to go cap in hand to the Bank is the most tangible sign that the crisis in financial markets is spilling over into businesses that touch most of our lives," he said.

 

The Governor of the Bank of England, Mervyn King, said in a letter to the Treasury Select Committee on Wednesday that the Bank would be prepared to provide emergency loans to a bank that ran into difficulties, so long as those difficulties were the result of temporary market conditions.

 

"The fact that the Bank of England has been prepared to act as the lender of last resort is an indication that it thinks the problems at Northern Rock are temporary ones," Mr Peston added.

 

The loan would be provided at a penal interest rate, he said.

 

Following the widespread losses made by investors in loans to US homebuyers with poor credit history, the so-called sub-prime loans, investors have become wary of buying all mortgage debt, including Northern Rock¿s.

 

"All banks are having greater difficulties than normal getting funding from the market," Mr Peston said.

 

"But as a specialist mortgage lender, Northern Rock, no-one really wants to lend to them."

 

 

Source: http://news.bbc.co.uk/1/hi/business/6994099.stm

[Tribal 0]

Sports Direct so sponsor NUFC next season.

[Jimbo 172]

Can't see that happening, companys pay millions to sponsor football clubs, why would Ashley miss out on the income to sponsor himself ?

[Ketsbaia 0]

Is it possible, that since the money we spent was done on what we had coming in, that Ashley and his mates got wind of Northern Rock's financial trouble and paid of £30million of our debt?

[Gemmill 44114]

Is it possible, that since the money we spent was done on what we had coming in, that Ashley and his mates got wind of Northern Rock's financial trouble and paid of £30million of our debt?

 

Say what?

[Tribal 0]

Can't see that happening, companys pay millions to sponsor football clubs, why would Ashley miss out on the income to sponsor himself ?

 

I wasn't being serious.

[Ketsbaia 0]

Is it possible, that since the money we spent was done on what we had coming in, that Ashley and his mates got wind of Northern Rock's financial trouble and paid of £30million of our debt?

 

Say what?

 

Ashley paid off £30mill of our debt from his own pocket. Could he have done this because we'd spent money we didn't have and he got wind of Northern Rock's financial situation?

[Sicklee Sausage Roll 0]

They should get one of those IVAs

 

If I'd kept my mortgage with them, and they went under, who would I owe money to?

 

Sorry Mr Roll, the debt was sold to Mr Terry Knuckles, who has increased the rate to 30%

 

Your kneecaps are at risk if you do not keep up repayments.

Edited September 13, 2007 by Sicklee Sausage Roll

[Gemmill 44114]

Is it possible, that since the money we spent was done on what we had coming in, that Ashley and his mates got wind of Northern Rock's financial trouble and paid of £30million of our debt?

 

Say what?

 

Ashley paid off £30mill of our debt from his own pocket. Could he have done this because we'd spent money we didn't have and he got wind of Northern Rock's financial situation?

 

That makes no sense though. If you owe a bank money and you thought it was in financial trouble, would you give them it back?

[Lazarus 0]

Havnt banks historically rallied round eath other in times of trouble?

 

Nowt to worry about.

 

 

 

 

 

 

 

(probably).

[Gemmill 44114]

Havnt banks historically rallied round eath other in times of trouble?

 

The main problem at the minute is that none of the banks will loan to one another. Libor (the rate at which banks lend to one another) is currently higher than the BoE emergency lending rate which basically means that all of the banks are stood giving each other the V's. The fact that the BoE has come to NR's aid is actually a good thing though as it means it sees this as a short term problem that will be rectified when the markets return to normal and people stop shitting their pants about this sub-prime crisis. If the BoE thought they were in any danger of going tits up, they wouldn't be stumping up the emergency funds.

[Craig 6670]

32% drop in share price and customers 'queuing' outside the branches to withdraw their money.....

 

I'm no financial expert but surely the second part of that statement is not good news for NR?

 

I've just had a plethora of text messages from supposed mates asking if NUFC were having to flog more shirts so we can pay the sponsorship back.......funny bastids!

[Craig 6670]

Wait a minute, the penny's just dropped. Aren't NR Gemmill's latest employers??

 

Old 'carrot-top' hasn't been let of the leash and been allowed to do a 'Nick Leeson' has he?

[ewerk 30167]

Start buying up NR shares at that price.

[Fop 1]

Is it possible, that since the money we spent was done on what we had coming in, that Ashley and his mates got wind of Northern Rock's financial trouble and paid of £30million of our debt?

 

Say what?

 

Ashley paid off £30mill of our debt from his own pocket. Could he have done this because we'd spent money we didn't have and he got wind of Northern Rock's financial situation?

 

No that issue was purely down to FFS (mismanagement). Nothing to do with Northern Rock or anything else.

[Fop 1]

Havnt banks historically rallied round eath other in times of trouble?

 

The main problem at the minute is that none of the banks will loan to one another. Libor (the rate at which banks lend to one another) is currently higher than the BoE emergency lending rate which basically means that all of the banks are stood giving each other the V's. The fact that the BoE has come to NR's aid is actually a good thing though as it means it sees this as a short term problem that will be rectified when the markets return to normal and people stop shitting their pants about this sub-prime crisis. If the BoE thought they were in any danger of going tits up, they wouldn't be stumping up the emergency funds.

 

Yup NR are actually in good shape as far as their borrower portfolio is concerned (very little high risk lending).

 

Their problem has been their rapid and aggressive expansion into a mortgage major player by going 75% from other lenders (which are now being hit by the whole sub prime thing) and only 25% from their own saver assets (most banks are at 50:50 or less).

 

Worked well while everything else was going fine (£12.50 share price feb this year), but now it has problems (and a £4ish share price) and finds itself overextended, but yep it still should be fine with the BoE backing it...... although it might be ripe for a takeover now maybe.

[Gemmill 44114]

Havnt banks historically rallied round eath other in times of trouble?

 

The main problem at the minute is that none of the banks will loan to one another. Libor (the rate at which banks lend to one another) is currently higher than the BoE emergency lending rate which basically means that all of the banks are stood giving each other the V's. The fact that the BoE has come to NR's aid is actually a good thing though as it means it sees this as a short term problem that will be rectified when the markets return to normal and people stop shitting their pants about this sub-prime crisis. If the BoE thought they were in any danger of going tits up, they wouldn't be stumping up the emergency funds.

 

Yup NR are actually in good shape as far as their borrower portfolio is concerned (very little high risk lending).

 

Their problem has been their rapid and aggressive expansion into a mortgage major player by going 75% from other lenders (which are now being hit by the whole sub prime thing) and only 25% from their own saver assets (most banks are at 50:50 or less).

 

Worked well while everything else was going fine (£12.50 share price feb this year), but now it has problems (and a £4ish share price) and finds itself overextended, but yep it still should be fine with the BoE backing it...... although it might be ripe for a takeover now maybe.

 

Aye that's about the size of things. It's the idiots queuing outside the branches you need to worry about. And I'm not just talking from Northern Rock's point of view - you really have to wonder exactly how these people manage to clothe themselves in the morning. "I know. I'll take my money out of the institution that's just secured an unlimited lending facility with the Bank of England and put it into one that is undoubtedly affected by the liquidity crisis but which has no such support." Simpletons.

[sweetleftpeg 0]

Collectively, people are stupid.

[sweetleftpeg 0]

From the Beeb:

 

There were still queues of about 70 people at a Northern Rock branch in Golders Green on Tuesday morning waiting for the bank to open even after the government's unprecedented move to restore confidence in the British banking system.

 

But in its home town of Newcastle, the streets around the bank were quiet.

 

Correction; Southerners are stupid.

[peasepud 59]

I was quite disgusted that yesterday no sports/ entertainment or business names turned up when NR asked them for support. It wouldnt have taken a great amount of their time to do, would have been publicity for them and helped NR out a touch. But as always it seems these people are keen to take the money in sponsorship/ support etc from them but not get off their arses to help.

[sweetleftpeg 0]

I was quite disgusted that yesterday no sports/ entertainment or business names turned up when NR asked them for support. It wouldnt have taken a great amount of their time to do, would have been publicity for them and helped NR out a touch. But as always it seems these people are keen to take the money in sponsorship/ support etc from them but not get off their arses to help.

 

Sir Berb has apparently released a statment saying he's going to open up an account this week. He was supposed to go into one of the Newcastle branches to do it but apparently he's too ill so he's going to open it up online.

[peasepud 59]

Sir Berb has apparently released a statment saying he's going to open up an account this week. He was supposed to go into one of the Newcastle branches to do it but apparently he's too ill so he's going to open it up online.

 

As always Sir Berb can be relied on, shame the likes of Owen, Shearer et al arent so quick at coming forward.

[Craig 6670]

Shares are going back up it seems

[Tom 14011]

I used to go school with the Chief executives son, dont know why thats relevant but yeah

[Meenzer 15347]

Just been to Sainsbury's, and the checkout dweeb started his pre-rehearsed patter with a line about "So have you got any money with Northern Rock then?". I don't think he was expecting a vitriolic, Gemmill-on-the-last-page-style rant about the utter retardedness of the general public. Oh well. :icon_lol: