Savers return as crisis eases

Sep 19 2007 by Adrian Pearson, The Journal

THE Northern Rock fightback began in earnest yesterday, as bosses declared themselves “delighted” with the public response to their battle for survival.

Yesterday the queues diminished, the share price rose and new accounts were opened, as The Journal and the North-East’s business and community leaders stood firm to offer the bank their full support.

After a three-day run which saw more than £2bn withdrawn, the Chancellor of the Exchequer’s promise to compensate any losses if the bank collapsed appeared to have calmed customers.

And a host of big names led the droves of savers who followed The Journal’s lead and opened accounts with Northern Rock yesterday.

The customers who had previously queued for hours to withdraw their savings were yesterday nowhere to be seen, with staff at just four branches out of 76 in the UK reporting queues as they opened. And only four people were waiting outside the Newcastle city centre branch when it opened its doors at 8am.

The Journal newsroom was yesterday inundated with requests from businesses and community groups requesting details of our campaign to email to their networks of contacts.

Northern Rock’s shares rose 8% yesterday, up 23.25p to 306p, and chief executive Adam Applegarth last night told of an incredible day at the office.

He said: “We are delighted to say we have turned the tide. Customers are returning, queues have disappeared, and phone calls have dramatically reduced.

“Now, eight out of 10 calls we receive are from people wanting to invest in the bank. We are absolutely delighted with the response.”

The bank’s call centres had just 9% of the calls they had on Monday. At 10.30am they had received just 3,472 calls compared with 36,894 by the same time the previous day.

Northern Rock said that of those calls more than 2,500 were to reinvest money. And bosses said anyone who has taken money out will have their transfer charges refunded if they reinvest it with them.

A spokesman for the bank said: “Any customers who, under the terms and conditions of the account, had to pay a charge or transfer fee to withdraw money due to concerns about the current situation will have that charge refunded if they reinvest the funds into the same type of account with Northern Rock by October 5.”

One customer at the bank’s Northumberland Street branch yesterday was Pam Pridie, 60, a probation officer, from Jesmond, Newcastle, who was withdrawing her normal weekly amount.

She said: “I understand why people panic and it has a knock-on effect when you see other people panicking. But people can stop panicking now – if you can trust the Government, but I think it’s unlikely they would say that if they couldn’t carry it through.”

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6,000 jobs are on the line

WHEN hundreds lined the streets to get their money out of Northern Rock on Saturday, retired Sue Brayfield was ushered to the front of the queue to pay hers in.

Originally from London, the 61-year-old believes the North-East has a strong history of pulling together during difficult times and opened her first Northern Rock account at Northumberland Street.

“What I want to do more than anything is to make sure that Newcastle doesn’t lose thousands of jobs because of some irresponsible media scare-mongering,” said Miss Brayfield, of The Crest, Dinnington, Newcastle. “That’s what I believe will happen if we all go on taking our money out. Northern Rock won’t go bust but it probably will be taken over by another financial institution.

“That takeover will be followed rapidly by restructuring and that will mean redundancies – almost certainly for the Rock’s staff in this area rather than anyone else and this will happen around Christmas.”

Miss Brayfield, a retired ministry worker, is now urging Journal readers to back Northern Rock and to help safeguard more than 6,000 jobs for the future.

She added: “I’m a pensioner and don’t have money to waste, so you can believe I’m absolutely certain that my money will be safe with Northern Rock.”