The nationalised lender has launched a “new savings and mortgage bank” which comprises of retail savings balances of approximately £19bn and approximately £10bn of residential mortgages. It is also offering new savings products and new mortgage lending services.
The bank has also revealed that the Government and the FSA are currently reviewing the possibility of removing the state guarantee on its savings deposits and reverting back to Financial Services Compensation Scheme cover only.
Northern Rock Asset Management has also launched today, which will act as an administrator to Northern Rock’s wholesale assets and debts.
It will hold and service a residential mortgage book of approximately £50bn, of which up to £5bn are in arrears. It also controls a portfolio of personal unsecured loan accounts of around £4.5bn.
The portfolio also includes the bank’s residual interest in those mortgages which have been sold to the Granite securitisation programme and the Northern Rock covered bond programme totalling approximately £38bn. Northern Rock Asset Management will no longer undertake any new mortgage lending.
Chief executive Gary Hoffman says: “I am pleased to announce that we have successfully completed the legal and capital restructure. This helps to build a stronger future and delivers value to taxpayers.
“All savings accounts have been transferred to the new bank and we are writing to our savings customers to confirm that. We are also writing to mortgage customers of the new bank to confirm that their accounts have been transferred as part of the restructure. Our aim was to make this process as smooth as possible for all of our customers.”