Wednesday, August 15, 2007
Northern Rock Tumbles 9% , Credit Worries is the UK now !!
Northern Rock tumbled over 9 percent to hit a 3-year low on Wednesday as fresh signs of credit market deterioration sparked concern over its earnings and speculation it could issue a fresh profit warning. The mortgage bank, which raises most of the funds for mortgage lending in the wholesale credit markets, said in June that profit growth would slow this year due to the impact on its borrowing costs of the five UK rate rises in the past year.Credit jitters on Wednesday prompted more worries over the impact of the liquidity crunch on banks like Northern Rock, which are hit by a rising cost of funds and the narrowing margin between this and what they earn on loans.