Help keep the Rock Northern

Sep 22 2007 by Paul James, The Journal

AN urgent call went out last night to help keep the Rock northern amid fears of a takeover bid for the bank.

As experts predicted that Northern Rock’s fate could be sealed in the next week, business chiefs joined The Journal in stepping up their calls for people to get behind the bank, saying it was vital to the region that such a major plc is not lost.

The Journal believes that Northern Rock, which employs 5,600 people in the North-East, and whose charitable Foundation donates 5% of its profits to good causes, has captured hearts and minds in our region.

Unlike the other high-street banks it is not a faceless financial institution. Most people know somebody who works, or is connected to, Northern Rock. A great many families have been involved with a community project that has benefited from money from its foundation.

Existing deposits are 100% guaranteed. It is still as safe as houses to invest £2,000 in Northern Rock. And we are calling on everyone who has ever gained from the bank’s presence in the North-East to open a new account, which can be done for as little as £1.

If you feel you owe them anything at all, now is the time to repay Northern Rock.

The call to arms comes as experts told of the importance of Northern Rock to the region, with its head office, branches and 5,600 jobs.

Richard Slack, principal lecturer in accounting and finance at Northumbria University, said: “Over the next week is probably when it will be decided.

“The original customer panic has settled down. The wider issue that now faces the board is the collapse of the share price and whether or not there might be a predatory bid. Then we’re into a bad situation and who knows what would happen?”

Andrew Miller, based in Newcastle for Barclays Wealth, said: “Clearly it’s going to be difficult for the bank. The most likely scenario is that somebody takes them over. There are rumours but we don’t know at this stage who that might be.

“At least we have got a bit of calm now. It’s very difficult to speculate on what happens next and it’s probably a question of ‘Wait and See’ at this stage.

Journal editor Brian Aitken said: “This past week has seen an incredible amount of support for our campaign in support of Northern Rock. We feel the bank and its staff fully deserve that support.

“It is vitally important that people realise how much it means for the North-East to have such a plc based here.

“The support of the region can keep Northern Rock northern, but that support needs to come sooner rather than later.”

Chief Executive of the North-East Chamber of Commerce, James Ramsbotham, said: “People don’t realise how Northern Rock is interwoven into our lives at every level. In the North-East the Northern Rock has a real face.

“They provide nearly 6,000 direct jobs and impact on 1,500 other jobs, their head office is in the region, they use North-East suppliers and employ North-East people.

“Through its foundation we have a major plc that effectively invests profits back into the region.

“We’ve just got to keep it going. They’ve got to get deposits back into their coffers as soon as possible. The challenge is to get that happening fast so the share price can go up.”

Northern Rock deputy chief executive David Baker yesterday said banking was getting back to normal.

He said: “Things have calmed down. We are seeing more normal levels of business activity and continue to be delighted by the support being shown to us by our customers, The Journal and the North-East community in general, through this difficult period.”

Northern Rock’s shares made a modest rise of around 10p yesterday, closing at 194.3p, following its 28% slump on Thursday.

The bank’s share price has more than halved this week and the company is now worth just £818m, compared to £2.7bn the day before the Bank of England’s announcement of emergency funding facilities.