Jump to content
House Price Crash Forum
Sign in to follow this  
R K

Tesco To Buy Northern Rock?

Recommended Posts

http://business.timesonline.co.uk/tol/busi...icle6613502.ece

Tesco has emerged as a potential bidder for Northern Rock as the Government races to sell the state-owned lender before a general election, The Times has learnt.

The supermarket chain has shown provisional interest in buying the bank nationalised as the credit crisis brought the financial system within hours of collapse. Virgin, which tried to buy Northern Rock at the time, has expressed renewed interest and private equity funds have made inquiries.

Gordon Brown is keen to prove to voters that his rescue worked. If at all possible, he wants Northern Rock returned to the private sector at a substantial profit. Ministers say that he wants desperately to avoid a Conservative government taking the credit.

Whitehall officials told The Times that they “would not be surprised†if the bank were sold before the election.

The Treasury has drawn up a means of separating the good and bad assets to make it more attractive. Northern Rock holds deposits of £19.5 million and a mortgage book of £66.7 million. Some of the loans are so toxic that they are likely to stay in public hands.

The Government favours a sale rather than a flotation because it would be quicker. A Treasury spokesman insisted that the disposal of Northern Rock was not driven by political factors: “Any decision will be taken in the best interests of financial stability and of the taxpayer.â€

The Government is understood to have ruled out any imminent disposal of Royal Bank of Scotland, in which the State has a 70 per cent stake. Officials said that this would be premature as the European Commission has yet to approve the state aid used to recapitalise the bank. Others say that RBS would be complex to unravel because it has retail, commercial and investment banking interests worldwide.

Officials believe that any formal sales documents for Northern Rock cannot be drawn up until the Commission gives its ruling on whether the plan to split Northern Rock into a “good†and “bad†bank constitutes unacceptable levels of state aid.

Northern Rock has cut costs by reducing staff. In March it owed £8.9 billion on a government loan that stood at £26.9 billion at the end of 2007.

I'm trying to see the synergy here. Presumably it will be along the lines of flogging in-store financial 'products' to the illiterati so they come out with a mortgage and a MEW loan when they only went in for some value beans and a can of coke.

I suppose there's also some efficiencies in transaction processing if the punters buying your groceries also have bank accounts with you and use your payment card. Some sort of vertical integration of salary into bank account into Tescos sales ledger without you even noticing.

Supermarket banking is where this all went wrong in the first place - Now it looks like we're heading right back there at full throttle.

Share this post


Link to post
Share on other sites
I'm trying to see the synergy here. Presumably it will be along the lines of flogging in-store financial 'products' to the illiterati so they come out with a mortgage and a MEW loan when they only went in for some value beans and a can of coke.

"Some of the loans are so toxic that they are likely to stay in public hands."

Nothern rock has already been shedding the good loans, unless the government offer to back the most toxic under asset purchase, in which case Tesco could make easy money

Heads you lose, Tails I win.

GE Money is already offering cash and no clauses in return for shedding it's toxic waste.

Share this post


Link to post
Share on other sites

****** me the times is a truly pathetic rag.

When you don't know the difference between millions and billions, how the ****** can you write articles about finance.

Share this post


Link to post
Share on other sites
****** me the times is a truly pathetic rag.

When you don't know the difference between millions and billions, how the ****** can you write articles about finance.

Well spotted, or maybe the numbers are correct and they do only have £19.5 million of deposits. I think you're right though. The Times is turning into The Sun's older brother.

Share this post


Link to post
Share on other sites

http://business.timesonline.co.uk/tol/busi...icle6613502.ece

Tesco has emerged as a potential bidder for Northern Rock as the Government races to sell the state-owned lender before a general election, The Times has learnt.

The supermarket chain has shown provisional interest in buying the bank nationalised as the credit crisis brought the financial system within hours of collapse. Virgin, which tried to buy Northern Rock at the time, has expressed renewed interest and private equity funds have made inquiries.

Gordon Brown is keen to prove to voters that his rescue worked. If at all possible, he wants Northern Rock returned to the private sector at a substantial profit. Ministers say that he wants desperately to avoid a Conservative government taking the credit.

Whitehall officials told The Times that they “would not be surprised†if the bank were sold before the election.

The Treasury has drawn up a means of separating the good and bad assets to make it more attractive. Northern Rock holds deposits of £19.5 million and a mortgage book of £66.7 million. Some of the loans are so toxic that they are likely to stay in public hands.

The Government favours a sale rather than a flotation because it would be quicker. A Treasury spokesman insisted that the disposal of Northern Rock was not driven by political factors: “Any decision will be taken in the best interests of financial stability and of the taxpayer.â€

The Government is understood to have ruled out any imminent disposal of Royal Bank of Scotland, in which the State has a 70 per cent stake. Officials said that this would be premature as the European Commission has yet to approve the state aid used to recapitalise the bank. Others say that RBS would be complex to unravel because it has retail, commercial and investment banking interests worldwide.

So the taxpayer gets left with all the crap and the losses.

I may be a bit tad cynical here but as Tesco has expanded on debt buying NR would be a good insurance policy, merge it with it's current business, it then gets into trouble and the taxpayer has to come in and bail it out. I'm sure that won't happen but it's a thought.

Share this post


Link to post
Share on other sites
http://business.timesonline.co.uk/tol/busi...icle6613502.ece

So the taxpayer gets left with all the crap and the losses.

I may be a bit tad cynical here but as Tesco has expanded on debt buying NR would be a good insurance policy, merge it with it's current business, it then gets into trouble and the taxpayer has to come in and bail it out. I'm sure that won't happen but it's a thought.

Figure must be wrong in the article, sure it should be billions rather than millions.

Interesting thought on the motive for Tesco's wanting buy it, it may be a way of Tesco's getting a government bailout through the back door as their pyramid collapses. In this very corrupt world you have to think in this way to understand what is actually going on and I would say it is quite plausible.

http://www.bloomberg.com/apps/news?pid=206...id=aVK66flENfNY

Share this post


Link to post
Share on other sites

Tesco probably not interested in N. Rock

http://www.reuters.com/article/innovationN...E5601MJ20090701

LONDON (Reuters) - Tesco, Britain's biggest retailer, is unlikely to be interested in a bid for nationalized bank Northern Rock, an industry source said Wednesday.

Earlier, the Times newspaper said Tesco had shown a provisional interest, alongside private equity funds and Richard Branson's Virgin Group, in Britain's highest-profile victim of the credit crunch, which was nationalized in February 2008.

The industry source told Reuters the supermarket group had expressed some interest in the past, but this had not led to anything.

Tesco said it did not comment on rumor and speculation.

Share this post


Link to post
Share on other sites

I feel a sense of deja vu here.

Hace we not had a wiz bang hotshot retailer run a bank before. Bogof mortgages do not work very well in the log term.

Share this post


Link to post
Share on other sites
So the taxpayer gets left with all the crap and the losses.

That is the essence of all privatisation deals, the taxpayer gets screwed every time.

Share this post


Link to post
Share on other sites
So the taxpayer gets left with all the crap and the losses.

Those on the right will call it Socialism, when it is in fact INVERSE Socialism (robbing from the poor to fund the rich) & standard practice in Crony Capitalist State Capitalism (the only Capitalism that has ever functioned in advanced Industrial societies).

Share this post


Link to post
Share on other sites

I fill in surveys for Tesco - for the points they give me on my Clubcard which I use for holidays. It's that or put them on the credit card... :P

Anyway, I just filled in a survey which had questions about the various sizes of shops I use, telecoms services and, most interestingly in this context, financial services, including mortgates. It asked, amongst other things, how important 'trustworthiness' and 'brand' are.

I always wonder why they're asking about particular areas in the surveys, and what they're thinking of launching. Could be a clue.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   296 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.