NATIONALISED lender Northern Rock yesterday announced it will close its offshore banking operation in the channel island of Guernsey, another step in its turnaround plan as the lender prepares for a return to private ownership.
Northern Rock, the first major British victim of the credit crunch, said in a statement yesterday it would wind down the business over the coming months before shuttering it in September.
It said the Guernsey subsidiary “no longer meets the long-term commercial objectives of the company”. Northern Rock launched its Guernsey operation in February 1996. It currently has some 6,000 customers – who will have to find new homes for the almost £1bn they have on deposit with the lender.
Meanwhile the bank is understood to be considering plans to offer to buy back its junk-rated debt at a big discount to the orginal value. The move could raise £700m in profit and reduce the cost to taxpayers of running down the lenders so-called bad bank.
City A.M. Reporter