northern rock
UK nationalised bank Northern Rock reported that losses for the first half of 2009 have increased by almost 24% and puts the blame on the EU for not yet approving the banks restructuring plan.
Northern Rock said that the first half statutory loss of £724.2million was swollen by the £298.2million cost of a hedge against interest rate and currency volatility. The accounts also include charges related to government funding of £156.4million, which the bank expects to get back once the EU approves the restructuring plan.
The bank is expecting EU approval in the Autumn when the management will start preparations for the future sale of Northern Rock, although there is clearly no timetable in place for selling.
Government promises of pumping capital into Northern Rock to boost consumer lending by up to £14billion between 2009/2010 to help revive the property market appear to have fallen short, Northern Rock said it’s lending for 2009 would be closer to £4billion.
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