Press release

Another step towards independence for Northern Rock plc

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Another step towards independence for Northern Rock plc.

A further milestone in Northern Rock plc’s return to independence has been reached today, with notice that HM Treasury’s guarantee arrangements in place for the bank’s wholesale liabilities will end in three months time.

This announcement brings forward the end date of wholesale guarantees that, as previously stated, would not extend beyond 31 December 2010. The current beneficiaries under these wholesale guarantees are Northern Rock (Guernsey) and the Northern Rock Foundation, who both have funds on deposit with Northern Rock plc. Fixed term wholesale liabilities in existence at 01 January 2010 continue to be guaranteed until maturity. 

This decision was taken following a recommendation from UK Financial Investments (UKFI). The Financial Services Authority (FSA) and the Bank of England have also approved this decision.

This announcement does not affect the wholesale guarantee arrangements in place for Northern Rock (Asset Management) plc.

Notes for Editors

  1. Following the expiry of retail deposit guarantees on 24 May 2010, the guarantees for wholesale deposits and wholesale borrowings of Northern Rock plc will be lifted at close of business (5pm), 02 November 2010.

  2. Fixed term wholesale deposits existing on 01 January 2010 will be guaranteed to maturity. 

  3. Northern Rock (Guernsey) and the Northern Rock Foundation, who both have funds on deposit with Northern Rock plc, are the beneficiaries under these guarantee arrangements.

  4. On 8 December 2009, HM Treasury announced that the guarantees applying to Northern Rock plc’s wholesale liabilities would be withdrawn by 31 December 2010, undertaking to give at least three months notice.

  5. The termination of the guarantee arrangements in respect of Northern Rock plc referred to in this announcement does not affect any of the other guarantee arrangements announced on 08 December 2009 in respect of Northern Rock plc or Northern Rock (Asset Management) plc which, prior to this announcement, remained in force.

  6. Technical, legal and background details:

Non-media enquiries should be addressed to the Treasury Correspondence and Enquiry Unit on 020 7270 4558 or by e-mail to public.enquiries@hm-treasury.gov.uk

Media enquiries should be addressed to the Treasury Press Office on 020 7270 5238.