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Kohoutek

http://www.bbc.co.uk/news/business-13783724

Northern Rock is to be sold to a single buyer to raise about £1bn, Chancellor George Osborne is to announce.

He has rejected the other options of floating the bank on the stock exchange or remutualising it.

The auction of Northern Rock is expected to raise about £1bn, which is less than the £1.4bn the government injected into the bank, although not all of it is to be sold.

The former mutual has been split into a "good bank", containing customers' savings and about 70 branches, and a "bad bank" containing the more toxic loans.

The former is set to be sold, while the latter will continue to be owned by the Treasury.

STing

Spend £1.4bn, recoup £1bn, treasury holds onto the bad section of the bank which can't be sold.

Hundreds of millions of taxpayers pounds gone (from the public purse).

RenovationMan

I thought they reported that the so called 'bad bank' toxic debt wasn't as bad as everyone thought and that it was turning a profit?

Perhaps they need to re-evaluate the toxic debt with different criteria and move some of the better sub-prime into the good bank.

Degenerate

RenovationMan wrote: »

I thought they reported that the so called 'bad bank' toxic debt wasn't as bad as everyone thought and that it was turning a profit?

A bigger profit than the "good" bank, as I recall.

The "bad" bank holds riskier assets, but if default levels don't rise too high it could be quite an earner.