Association of Financial Mutuals comments on the sale of Northern Rock to Virgin Money
Commenting on the Government’s announcement today that Northern Rock has been sold to Virgin Money, Martin Shaw, Chief Executive of the Association of Financial Mutuals stated:
“The Chancellor’s announcement today that Northern Rock will be returned to the private sector reflects the advice given to him by UKFI. In their view, the government’s priority was to get the best cash terms on offer now. It remains to be seen in the long-run whether this is the best deal for the customers of Northern Rock and indeed the economy, particularly of the North East – the 2008 banking crisis provided clear evidence that financial stability and competition for banking services may not be served by yet another me-too bank.
It is disappointing that UKFI does not appear to have fully explored the option of remutualisation of Northern Rock – we believe that long term that was a better deal. We call on UKFI to issue a full report on the appraisal of options including the pros and cons of returning Northern Rock to the mutual sector.”