Big guns set their sights on Northern Rock

Jul 9 2010 by William Green, The Journal

CITY of London grandees could swoop for Northern Rock as a Treasury Minister yesterday declared it was a “platform” for new entrants to the banking sector.

Lord Levene, chairman of the Lloyd's of London insurance market, and international banker Sir David Walker are backing a new venture looking at bidding for the Rock and other taxpayer-backed bank assets.

Details of a bid for the Newcastle-based Rock could become public within days, with thousands of North East workers directly and indirectly affected by any developments.

UK Financial Investments, which oversees Government-owned banking assets, and the City regulator have already been briefed.

The news came as The Journal spoke to Treasury Minister Mark Hoban, who has responsibility for financial services, about the future of Northern Rock.

The Financial Secretary to the Treasury said: “I have certainly spoken to Lord Levene, but I have made it very clear that it is down to UKFI to manage this process.”

And while declining to discuss the details of that conversation, he stressed the coalition was committed to increased competition and diversity.

While not completely dashing hopes of the Rock becoming a mutual society, again, he indicated that the best return for taxpayers was the key objective.

That may be an indication that a sale to the private sector is more likely, particularly given the Liberal Conservative Government's goal of cutting the national deficit.