Northern Rock set for sell-off

THE government has invited pitches for financial advisers to assist in offloading its stake in the nationalised bank Northern Rock.

UK Financial Investments, the body that administers the taxpayer’s stake in bailed-out banks, opened itself up for a “beauty parade of investment banks” yesterday.

It said that it is considering a range of options, but most observers think a sale of the Northern Rock “good bank” – as opposed to the “bad bank” privatised last year – is most likely.

The “good bank” includes all of Northern Rock’s branches, deposits and IT systems, with estimates that the assets will fetch a price close to £1.5bn.

Credit Suisse is thought to be in good standing with UKFI, having handled a lot of government work during the financial crisis.

Goldman Sachs has also been cited as a strong contender, but industry sources queried whether it is in pole position given it was dropped as an adviser after a previous deal involving Northern Rock.

The sale is likely to attract strong interest from a range of banks which are looking to expand their presence in the UK. Virgin Money, NBVK Investments and National Bank of Australia are all thought to be interested.