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Northern Rock reports £585m loss
Tuesday 5th August 2008, 7:49AM BST.
Nationalised bank Northern Rock today announced a loss of £585.4 million for the first half of 2008.
The lender also reports a doubling of number of mortgage borrowers falling into arrears on their home loans have grown.
Some 27,000 properties were repossessed
However, the bank maintains its business plan taken on after nationalisation and says it is ahead of schedule on the repayment of its loan to the Bank of England.
The Novocastrian lender repaid £9.4 billion of its loan leaving £17.5 billion owed,compared with£26.9 billion at the end of December 2007.
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All those people clamouring for the nationalisation of BP, British Gas et al: take heed.
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nice one gordon!
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Good old Gordon, not has bad as when he sold our gold reserves when prices were rock bottom!
It will take twenty years to sort out New Labours waste and incompetance.
Then again we will be sold on Europe by then.
Thank you
Bliar, Clown & Co.
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H. St. John Peasbody – are you mad, Northern Rock went under before the Government took it over – how on earth can you expect the Government to make a profit with a business which was damaged to the extent that Northern Rock was?
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Looks like we are all doomed to loose ALOT of our money here then, would we really have noticed if norhtern rock went bust?? I doubt it, we are all £4000 each worse off now though, thanks Darling
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Y Mab Darogan: Northern Rock should have been left to the market. The Government should not have intervened in this whatsoever. I didn’t expect the Government to make a profit but I did not expect it to plough £3,000,000,000 of tax-payers’ money into Northern Rock!
We’ll be paying for this for years.
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THA’S WHAT HAPPENS WHEN YOU LET POLITIANS RUN A BUSINESS – THEY JUST CANT DO IT – PRVIATISE IT NOW!!!
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i agree if this government is so pro-market why nationalise a failing bank, they should have let it go bust, that’s the market, that would have stopped bad lending overnight
It blips between being Reagan esque and then virtually communist in its economic policy, lets have some consistency for god sake
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…. As well as most of Telford becoming environmentalists overnight you are all now economists too.
I’m not qualified to form a solid opinion on the subject as I’m sure most of you are not and on this basis its very easy to make judgements and demands on the governments decision to nationalise.
Working on the hard facts, the government took over a failing business that was losing money. Whoever took over Northern Rock is destined to struggle for a long time to turn it round. So a significant loss in this period is no surprise, and losses over the next 12 months to 2 years will also not be a surprise.
All of you that are shouting about the Government’s decision to nationalise should ask yourself if you would rather that the company collapsed and hundreds of thousands of people lost all their money.
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Big Matty: Yes – the Government should have let the company collapse and hundreds of thousands of people lose their money.
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i think you are all overlooking a few facts here.
1 1f the government had not acted a domino affect could have involved the british banking system
2 read the last para of the article again, the loan of 26 billion has been reduced to 17 billion
3 with banks like alliance and leicester having profits dropping by 99% among other banks, the n rock was not likely to be profitable for some time
have faith things will improve and the n rock will soon be paying it’s way and a healthy dividend to the government.
well done big matty you are right
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to be fair its good because ti shows they are paying the loan back quicker, i am confident EVENTUALLY we will all make a tidy buck out of this deal, when its broken up and sold off buyt we need to be patient til after 2010
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H.St. John Peasbody, I often agree with you but am unsure of the more widespread effects on so many people losing out in this case. In some ways I’m not bothered about people losing out, as after all its not my money and there is an element of risk in leaving money in a bank (although most people don’t realise this!)
What would the knock-on effect of this loss been to the economy? Would it have been beneficial to the majority while the minority lost out? If this were to be the case I think that maybe they should have lost their money! However if the economy would have been so badly damaged that consumer confidence and confidence in the banking system were destroyed would we have been left with a much larger and financially damaging result, then the government rescue was a good thing.
Being realistic, I’m sure the Government employ people much more intelligent and better qualified than me to calculate the result of each scenario. In fact maybe some of you commenting above are those experts as it certainly sounds as if you have a much better understanding of the National Economy and government spending than I do ;)
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nice one Labour, and they told us they could run the economy well, just got lucky for 12 years I reckon, now luck is out, even if they survive the global recession as seems likely they are lucky there too, even if it all recovers that will be luck too, even if unemployment and interest rates stay low despite high oil prices that will be luck too
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yeah that’s right ‘lucky’ for 12 years on the trot, like man utd lucky to keep winning the title!? I think consistently good for the economy and i think you will see with history that saving northern rock, was VERY important for all our mortgages and savings and will be heralded as a difficult but correct decision in the long term, you’ll see, we’ll come out of this smelling of roses, still having one of the biggest economies in the world
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they should let the market sort it out, ie let the rock go to the wall, that will sting the investors and stop such poor lending practices in future
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what does novocastrian mean?
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thankfully mick beck and harold peasebody we are a long long way from the dark old days and satanic mills of maggie thatcher, and this government will get us out of this global mire and prevent a return to those bad old days.
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novocastrian, novo means new and castrian may mean a member ie lancastrian is a member of lancashire? i am guessing about the latter part but it may mean newcomer, any budding latin scholars out there? it is 50 years since i took latin!
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I dont think the northern rock purchase is that bad a deal, buy it cheap, ride out the recession and it will be worth millions in the long term, its good debt as debt goes, houses, atleast there is some security ie you repossess the asset
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the peoples bank – that’s what they should call it – like the peoples post office, and the peoples lottery, its loosing money hand of fist and wouldnt look out of place in Havana or Pyong-Yang, this is what happens when you let those damn socialists run things!
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it will get worse before it gets better, but it will get better, we’re hardly poor in this country are we? really now, just because petrols expensive for a while, drive less, the walk will do you good, the economy goes in cycles, it will be down for approx 2 years (though still GROWING) i hasten to add, but it will bounce back soon
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PS – Novocastrian (no comparative or superlative). Of or relating to Newcastle.
AKA a Geordie
Big words for the Shropshire Satr!!
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Those criticising Gordon Brown for this seem to be overlooking the facts, which are:
The difficulties for Northern Rock were caused by a reduction in available inter-bank lending, thus damaging its money supply. Couple that with a lot of hysterical people withdrawing their money, and the bank got into difficulties. If the government hadn’t stepped in, there may well have been a disastrous domono effect causing other banks to crash.
Should the government have let it go to the wall? Whilst I couldn’t care much about the shareholders, other than perhaps the pension funds who will have invested part of their portfolio in it, you have to care about the ordinary savers and mortgage holders – they did nothing wrong. For that matter, neither did Northern Rock – its lending policies were always pretty sensible, and it didn’t get into difficulty over bad debt of its own.
The fault lies with the greedy money men in the US who precipitated this whole problem in the first place.
And let’s not forget – most of the money given to Northern Rock is a loan, being paid back at a quicker rate than expected. The public purse will be reimbursed, ansd there’s a good chance that the bank will ultimately be sold, profitably, for the benefit of the country.
As Big Matty says, there’s a lot of people commenting here who don’t have the first idea about economics.
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Brown is not a strong leader and worryingly for an Ex-Chancellor, seems to have lost his monetary senses.
I know it’s a cliche but this Government and PM are a joke, they’ve had their day (and yes I do remember a lot of things where an improvement on Thatcher & co).
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thanks mike, i’m looking forward to walking to kidderminster every day
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natwest royal bank of scotland results put n/rock results into perspective. g brown knows what he is doing thank goodness
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If they were to go bust would my loan be written off ???
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thank god we finally have a PM of substance not another blair spinnner like D.C. Brown knows the economy well, as per the supposed recession in 2001 we will do better than most and he will sort it because he knows best and had the balls to make decisions like independant bank of england and nationalising the northern rock, policies tories would avoid due to their laissez faire approach to life in general and not caring about anyone but the big earners
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