[UK] Northern Rock plc - Subprime
This is a retroactive addition (today is 2009-05-18). Having been placed in "temporary public ownership" by Her Majesty's Treasury in February of 2008 and now facing the possibility of permananent nationalisation, Northern Rock plc is certainly deserving of a place on our list of International Implodes.
In recent news, the EU Commission has extended the scope of its investigation into the UK's aid package for Northern Rock due to recent amendments which would split the company into two entities:
"The amended plan provides for a split-up of Northern Rock into two new entities, a relatively small bank containing all the good quality assets, the mortgage writing platform and the retail deposits and a "bad bank" which would hold the vast majority of the mortgage loans made by Northern Rock in the past. The "bad bank" would be wound down on a solvent basis, where the UK State would support the losses incurred on the risky mortgage loans made by Northern Rock in the past."
Amendments to UK authorities' original plan to facilitate the bank's return to the private sector came when bids from potential investors failed to satisfy regulators that they would adequately protect the interests of taxpayers.
The Independent published a timeline of Northern Rock's descent, including this entry detailing the impact on employees as reported on 2008-03-18:
"More than 2,000 jobs at Northern Rock are to go, the company confirms. It said "around a third" of its 6,500 jobs will be cut by 2011, with most staff leaving in the first year."
Northern Rock was the 5th largest bank in the UK, with mortgage lending being its core business. After entering the subprime lending arena in 2006 through a deal with Lehman Brothers, mounting losses forced the bank to seek a liquidity support facility from the Bank of England in September of 2007 which led to a run on the bank. A detailed report on the bank's operations and history can be found on Wikipedia. We also have an insightful account of the bank's takeover on Bank Implode-O-Meter.
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Important: This company is on our list of lending operations that have "imploded". However, please note that "imploded" is a somewhat subjective and does not necessarily mean operations are ceased permanently: it can mean bankruptcy filing, temporary but open-ended halting of major operations, or "firesale" acquisition. All information here is provisional, and may contain inaccuracies (especially newer information). If you are planning on doing business with this company or any other one listed on this site, you should inquire with them directly on whether they can still meet your needs. Many are still operating in some capacity.