N.Rock capital below minimum as waiver expires

July 1, 2009

Pedestrians walk past a branch of the Northern Rock bank in the City of London   LONDON, July 1 (Reuters) – UK state-owned bank Northern Rock’s capital has fallen below the regulatory minimum but it has been cleared to continue business as normal.
   Northern Rock <NRKx.L> said on Wednesday the expiration of a waiver on how its capital was dealt with had pushed down its capital but it will address the situation through a legal and capital restructuring already outlined.
   The regulator will not restrict activities prior to the plan being implemented, the bank said.
   Britain’s Financial Services Authority (FSA) last July granted it a waiver to use Tier 2 capital to allow it to meet its minimum regulatory capital. That waiver expired on Tuesday.
   Northern Rock’s total capital ratio under the waiver was 10.8 percent at the end of 2008, but has fallen as the bank expects to be “substantially loss making” this year.
   In March the UK Treasury said it would take any steps needed to ensure the bank met its capital requirements.
   Northern Rock was nationalised in early 2008 after becoming the first major British casualty of the credit crunch in September 2007 when rising wholesale borrowing costs left it unable to fund itself.
   Northern Rock’s restructuring into two separate units — BankCo and AssetCo — cannot take place until the European Commission has approved state aid for the bank. That clearance is unlikely before the autumn. [ID:nLQ888052]
   Up to 3 billion pounds of additional capital will be provided for BankCo and AssetCo under the plan.
   Suitors are expected to cast an eye on BankCo, which is expected to include the bank’s new loans, deposits, better quality assets and branches.
   Tesco <TSCO.L>, Britain’s biggest retailer, is unlikely to be interested in a bid, an industry source said, following a newspaper report that it had shown a provisional interest. [ID:nLQ888052]
   Suitors may not emerge until the split of the bank’s assets is clearer, another industry source said.

1,860 comments

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

You could definitely see your enthusiasm within the paintings you write. The sector hopes for more passionate writers such as you who aren’t afraid to say how they believe. At all times follow your heart.

I like the valuable information you provide in your articles. I’ll bookmark your weblog and check again here regularly. I am quite sure I will learn many new stuff right here! Best of luck for the next!

Greetings! I’ve been reading your website for a long time now and finally got the courage to go ahead and give you a shout out from Humble Texas! Just wanted to mention keep up the excellent work!|

I think this is among the most significant info for me. And i’m glad reading your article. But should remark on few general things, The website style is wonderful, the articles is really great : D. Good job, cheers

I simply could not depart your web site before suggesting that I actually enjoyed the usual info an individual provide for your guests? Is going to be again often to investigate cross-check new posts

wonderful submit, very informative. I wonder why the other specialists of this sector don’t realize this. You should continue your writing. I’m confident, you have a huge readers’ base already!|

I’m gone to tell my little brother, that he should also pay a quick visit this weblog on regular basis to get updated from most up-to-date news.|

I used to be suggested this website by way of my cousin. I’m no longer sure whether or not this publish is written by means of him as no one else realize such designated about my problem. You are wonderful! Thank you!

I have been surfing on-line more than three hours today, yet I by no means discovered any attention-grabbing article like yours. It is pretty worth sufficient for me. In my view, if all webmasters and bloggers made excellent content as you did, the net will probably be a lot more helpful than ever before.|

Hey very cool blog!! Man .. Excellent .. Amazing .. I’ll bookmark your blog and take the feeds also…I am happy to find so many useful information here in the post, we need develop more techniques in this regard, thanks for sharing. . . . . .