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Telegraph: Northern Rock Losses Grow By More Than £500m

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Northern Rock losses grow by more than £500m

Northern Rock is estimated to have lost more than £500m in the past six months, putting it in breach of regulatory rules even after they were relaxed for the nationalised lender last year.

http://www.telegraph.co.uk/finance/newsbys...-than-500m.html

Well there's a surprise!.....[not].

I'll bet it's even worse than they're saying......

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The Basle minimum on capital requirements, though, is between 4pc-8pc, which means the bank has lost money far faster than expected in the first half of 2008. Northern Rock made a £1.36bn loss last year after £1.15bn of bad debts and provisions. A third of its £67bn mortgage book was in negative equity.

The bank plans to convert £3bn of the taxpayer’s £14bn loan into equity to recapitalise as part of a restructuring, which will see bad loans put into a “bad bank†and the deposits, branches and about £10bn of good lending put into a "good bank"€. [/i]

So, just on mortgages alone, that's about £57bn of shit lending that cannot be put into a good bank.

Edited by OnlyMe

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Northern Rock losses grow by more than £500m

Northern Rock is estimated to have lost more than £500m in the past six months, putting it in breach of regulatory rules even after they were relaxed for the nationalised lender last year.

http://www.telegraph.co.uk/finance/newsbys...-than-500m.html

Well there's a surprise!.....[not].

I'll bet it's even worse than they're saying......

Possibly so, but it's nowhere near the 100 billion figure bandied about a while back.

Or the 17 billion (?) paid back already.

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Would expect all the 170,000 'Together mortgage' holders to be in serious negative equity now or have already

been repossesed ............... total massacre for these last days of the boom kamikaze buyers ......

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In the past two weeks NRK have decided to accept possession orders suspended on payment of monthly instalments. NO contribution towards arrears.

This is all ********. The debt really means nothing to them. All that matters is the appearance.

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Guest sillybear2

B&B will be a bloodbath too.

New Labour, New Failure

Look at this - http://www.telegraph.co.uk/finance/persona...-elsewhere.html

"In a separate move, it has emerged that many borrowers in negative equity are now being offered preferential mortgage deals from the high street banks largely controlled by the Government.

Lloyds-owned Halifax, which is 40pc backed by taxpayers, and NatWest, part of the Royal Bank of Scotland (RBS) group, which is 70pc owned by the taxpayer, are providing mortgages that are about 1.5 percentage points cheaper than their normal range to customers whose outstanding loans are more than their property value.

However, these rates are offered only to existing customers in negative equity – they won't be those looking to remortgage at rival banks."

Labour attempts to put off the day and postpone repossessions will mean complete melt down for all these banks, they're being used as a political tool and it's going to cost hundreds of billions in losses.

Edited by sillybear2

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Time to start repossessing like billy-o and pay off those debts !!!

How else will they fund it.

If only it were that simple, that the liquidation value would cover the debt.

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Guest KingCharles1st

Can't Gorgon (as their new boss) defer their losses until 2010/11

Like his spending borrowing or summat-- :unsure:

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If only it were that simple, that the liquidation value would cover the debt.

Yep it would probably create even bigger losses as all other banks would have to panic and repossess.

Then you have to figure out where the money will come from for other people to buy the houses with.

It's catch 22.

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Possibly so, but it's nowhere near the 100 billion figure bandied about a while back.

Or the 17 billion (?) paid back already.

this £500m is to do with profit/loss at the bank in a given period, and the £100 billion was to do with total (potential) taxpayer liability, two completely different things. So not really a cause for celebration after all

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Guest sillybear2
this £500m is to do with profit/loss at the bank in a given period, and the £100 billion was to do with total (potential) taxpayer liability, two completely different things. So not really a cause for celebration after all

Except the £500m is proof that the £100b liabilities are very real and are being crystallized.

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Except the £500m is proof that the £100b liabilities are very real and are being crystallized.

For the taxpayer to be on the hook for £100bio the assets would have to be worth zero. However stupid you are I don't think that you really believe that.

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Yep it would probably create even bigger losses as all other banks would have to panic and repossess.

Then you have to figure out where the money will come from for other people to buy the houses with.

It's catch 22.

We just need a revolution. It could come sometime anyway.

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Except the £500m is proof that the £100b liabilities are very real and are being crystallized.

but they're still 2 entirely different things, one's about how much profit/loss is being made, one's about total value of guaranteed liabilities. Andy linked the 2 as if to say £500m was ok or good because it wasn't £100bn, and I was just pointing out that they're in no way comparable

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Guest sillybear2
For the taxpayer to be on the hook for £100bio the assets would have to be worth zero. However stupid you are I don't think that you really believe that.

Consider a 10% hair cut, not unreasonable right? That means the tax payer eats £10b losses at a time when the govt is totally bankrupt.

They should never have let the bank run up these liabilities in the first place, where was the oversight, their 125% 'together' loans were like a siren declaring their own f**kwittedness. Where were the FSA? And look at the new banking bill, just full of denial and half measures about the sh1t storm the financial sector has created, calling for virtually no changes, and why not, just lump the tax payer with total liabilities in excess of GDP and it's business as usual.

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I thoght they were in profit when Mr Darling was proposing huge bonuses to the NR management team for their 'excellent' performance!

http://www.guardian.co.uk/business/2009/fe...rn-rock-bonuses

Is it still going on as planned?

Any way, whatever loss they incur, we, the tax payers are going to pay which ever government is in power. So no worries. Let them continue playing.

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Consider a 10% hair cut, not unreasonable right? That means the tax payer eats £10b losses at a time when the govt is totally bankrupt.

They should never have let the bank run up these liabilities in the first place, where was the oversight, their 125% 'together' loans were like a siren declaring their own f**kwittedness. Where were the FSA? And look at the new banking bill, just full of denial and half measures about the sh1t storm the financial sector has created, calling for virtually no changes, and why not, just lump the tax payer with total liabilities in excess of GDP and it's business as usual.

Loans are assets, not liabilities. What are you talking about? You clearly have no clue.

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Guest sillybear2
Loans are assets, not liabilities. What are you talking about? You clearly have no clue.

Not if the loan book is increasingly in default, that's the point.

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