Nothern Rock

homer_j_3

As I understand this, it is going to end up in a media hype and the y2k syndrome with the information that is being pushed around at the moment.

I believe that NR are asset rich at the moment but not cash rich. The fact that the market that would turn some of those assets into cash is going through turmoil is the reason why they have secured funding from BOE.

It is not anything to do with their debts being bad or them not making any money, in fact I believe it is estimated that their pre tax profit to be around £500m.

The steps that they have taken are being taken to help them adjust their business model to ensure that they can continue to offer mortgages going forward. Whilst I will admit that I have not spent a great deal of time looking at all the sources of information, my opinion is that existing customers have nothing to worry about. People with applications going through have nothing to worry about.

The UK mortgage market is highly regulated and NR currently exceeds the capital levels required by the Financial Services Authority to operate in this market and have "good" loan book. They are still very much solvent too!

So whilst it is easy to say that this is putting the writing on the wall, I think its good evidence of lessons learnt of the industry and that these issues are being dealt with very cautionary and with prudence.

Gorgeous_George

I would be an ex NR customer too.

Building societies pretending to be banks is pants. I blame the carpetbaggers.

GG

toonfish

I presume everyone with a Northern Rock mortgage will be trying to sue their broker for stress next? They are not in any danger of going bust, but could be a ripe target for a takeover.

Panicking about nothing IMO - first thing I did this morning was bought a few NR shares.