Northern Rock Successor Lined Up For Nationalisation

The Treasury has announced that it has recruited a new executive for Northern Rock should the bank be nationalised, in the most significant indicator to date that the government intends to bring the troubled mortgage lender under national control.

The announcement came over the weekend, with former Lloyd’s executive Ron Sandler selected and confirmed as the candidate of choice for the position, should it become available in a nationalised Norther Rock. But the move has been taken as some to be a strong suggestion that the bank could be brought into public hands, with a view to securing the outstanding government sponsored debt and propping up the continued lending operation at the bank.

According to sources close to the matter the government has already developed its own action plan for acquiring and running the rock, which it is thought could be in place over the next few days if there is no route for a commercial resolution to the situation.

Whilst there had been a number of private equity groups and consortiums interested in acquiring the Rock, fears about funding and raising capital amidst the current credit crunch environment have put off a number of would-be buyers, and made the possibility of achieving an agreeable commercial solution more slim.

Mr. Sandler has a previous track record of success within the banking industry, particularly through difficult times, seeing NatWest through the difficulties of a hostile takeover and Lloyd’s insurance market for several years, as well as advising for the Treasury on pension and savings matters.

Whilst there has as of yet been no word of exactly what will happen to the bank over the next few weeks, it looks certain than Northern Rock’s fate will be sealed sooner rather than later.

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