MSE News: Virgin Money to buy Northern Rock for £747m

edited 17 November 2011 at 3:17PM in Budgeting & Bank Accounts
32 replies 5.9K views
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  • edited 18 November 2011 at 10:33PM
    JuicyJesusJuicyJesus Forumite
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    edited 18 November 2011 at 10:33PM
    In any other country, it would sound absurd: private businesses run the water systems and get to make a fixed amount of profit regulated by Ofwat... whaaat?

    In Bolivia there were riots over the plan to sell off the water system for a profit. People died. It got reversed. http://en.wikipedia.org/wiki/Cochabamba_protests_of_2000

    Here, we flog off everything... nary a peep.
    20 years after the fall of the USSR, it's weird how one can still feel obliged to say, "This doesn't mean I'm a pinko!" It's like people who argue against censorship on the 'net find themselves needing to say, "That doesn't mean I'm a pedo!" There are knee-jerk assumptions where unless you're totally one way it is assumed that you are completely the other: and not just ideologically pure but sinister.

    Well, "socialism" is a dirty word just about everywhere now. It isn't really a label used seriously by anyone except the people who believe in it; the people who don't just use it as a smear tactic. Anything they don't like is "socialist", just as how anything Labour did "wrong" was smeared as "politically correct" (somehow).

    The !!!!!phile thing is true too. Too many people think that if you're against censorship, you must be automatically for nonces. It's quite sad when not wanting to have censorship of everything while also not approving of men having sex with children is considered a "nuanced position".

    Also, telephones taking 2 months to be hooked up? BT took a month to properly hook up my phone and broadband service with them. The shiny new privatised BT. Bunch of cretins.
    urs sinserly,
    ~~joosy jeezus~~
  • pqrdefpqrdef Forumite
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    JuicyJesus wrote: »
    It gives Branson a customer base, employees, back office functions, banking systems and a branch network, which are very valuable things. Presumably these will be rebranded as Virgin Money, which will become a full-service bank.
    Except that NR don't do a proper current account, just a little-known savings account with some payment facilities but no overdrafts. And the FT reports that Virgin have no particular plans to go into that area, or expand the branch network. It will stay just a regional mortgage-shop chain.

    There isn't even any sign that Branson wants to run his own credit-card operation, instead of just renting his brand to an MBNA card.
    JuicyJesus wrote: »
    He's got a bargain.
    He's got a mortgage book to refinance and a credit crunch on the way. I hope his backers have got deep pockets.

    The odd thing is that Branson has been sniffing round Northern Rock for years, but he hasn't shown much interest in anything else on the market. Egg would have been up his street, one might have thought. N&P would have given him the same sort of stuff as Northern Rock, and current accounts, and a lot cheaper.
    "It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis
  • opinions4uopinions4u
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    Egg would have been up his street, one might have thought. N&P would have given him the same sort of stuff as Northern Rock, and current accounts, and a lot cheaper.
    Egg and N&P both had a wholesale funding gap that would need filling. Northern Rock don't.

    Northern Rock have an existing current account book. They can switch back on new applications whenever they choose.
  • pqrdefpqrdef Forumite
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    BBC business editor Robert Peston said the sale would see taxpayers end up with a "paper" loss of somewhere between £400m and £650m.
    A chunk of the extra money is only paid if Branson sells quick for a fat profit and makes the Government look silly. I don't suppose we'll see that money.
    "It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis
  • stonemanstoneman Forumite
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    This just stinks. All of those poor people in the North East who lost their pensions when the company was wound up in the first place and not a penny in compensation to them. I lost over £4000 when my shares disappeared but that was a gamble I took. The people around Newcastle that used to work for NR were given shares as a pension, and also the opportunity to add to it with discounted share options, some had £100,000's invested as their only nest egg, all wiped out and no future to look forward to.
    The common law of business balance prohibits paying a little and getting a lot. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.
  • opinions4uopinions4u
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    stoneman wrote: »
    The people around Newcastle that used to work for NR were given shares as a pension, and also the opportunity to add to it with discounted share options, some had £100,000's invested as their only nest egg, all wiped out and no future to look forward to.
    The various share schemes were in addition to the pension arrangements, not instead of.

    While I have a little sympathy, having lost a small fortune with my employee acquired HBOS shares, they had the choice to diversify their holdings.

    Like me, their combination of laziness and greed in failing to diversify gave them the result that they got.
  • How nice to know that my mortgage account with the 'bad part' of Northern Rock is part of a 'toxic' organisation! Incidentally, during the mortgage term of 12 years to date, I have never been in arrears. Despite this good payment record, if in future I wish to extend my mortgage term with NRAM, this is no longer an option for me.
  • opinions4uopinions4u
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    Ratstjohn wrote: »
    How nice to know that my mortgage account with the 'bad part' of Northern Rock is part of a 'toxic' organisation! Incidentally, during the mortgage term of 12 years to date, I have never been in arrears. Despite this good payment record, if in future I wish to extend my mortgage term with NRAM, this is no longer an option for me.
    So why not remortgage to a cheaper provider then?
  • Can someone help me out here? In June 2011 I got notification from my share dealing company that the Government had withdrawn all share rights and that Northern Rock shares were 'extinct', that's the word they used. Six months on the Government sell it to Virgin? So they've stolen all mine (and millions of other peoples) shares, then sold the business on? Is this legal? I'm gob-smacked!
  • ses6jwgses6jwg Forumite
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    twincamms wrote: »
    Can someone help me out here? In June 2011 I got notification from my share dealing company that the Government had withdrawn all share rights and that Northern Rock shares were 'extinct', that's the word they used. Six months on the Government sell it to Virgin? So they've stolen all mine (and millions of other peoples) shares, then sold the business on? Is this legal? I'm gob-smacked!


    You bought shares in a company. The company would have gone bust had the government not stepped in and thousands of people would have lost their savings. Instead the government rescued the depositers at the expense of shareholders.

    That is the risk when you buy shares. You didn't do enough due dilligence. The writing was on the wall long before the company suspended its shares. Why should the UK taxpayer be accountable for your bad/ lazy investing?
    Northern Rock shares plunge 32%

    Some customers were queuing outside Northern Rock branches
    Shares in one of the UK's largest mortgage lenders, Northern Rock, have fallen 32% after it had to ask the Bank of England for emergency funding.
    But experts and officials insist that Northern Rock, which has £113bn in assets, is not in danger of going bust.

    Despite the reassurances lines of customers formed outside many Northern Rock branches around the UK.

    The bank has struggled to raise money to finance its lending ever since money markets seized up over the summer of 2007

    Chart.aspx?Provider=EODIntra&Code=NRK&Size=610&Skin=BlueWhite&Type=2&Scale=0&Span=YEAR7&MA=&OVER=&IND=&COMP=&XCycle=&XFormat=&Layout=2Line;Default;Price;HisDate&SV=0

    I hold some shares in a company in Iraq drilling for oil. If they go bust, should the UK taxpayer bail me out too?
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