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Rock bids to end sub-prime panic

Northern Rock is trying to calm investors’ fears over its exposure to the US sub-prime crisis which has seen its share price halve since its March high.

In a statement to the stockmarket, Rock says its total investment in US collateral-ised debt obligations and mortgage-backed securities represent just 0.24 per cent of its total reported assets of £113bn.

It has £200m exposure to US CDOs and £75m to MBSs.

Rock’s share price has fal-len from its 12-month high of 1258p to 621p. Although it has seen a rise in the last week, trading remains volatile, with the price between 689.50p and 734.50p on Tuesday.

Hamptons managing director Jonathan Cornell says Rock may see growth slow as it may have to increase pricing while balance-sheet lenders are able to cut rates on fixed products.

He says: “Out of all the prime lenders, Northern Rock has the greatest exposure to the wholesale markets.”

A Rock spokesman says: “We continue to be active and compete in the market. Today’s market conditions do not impact on our existing funds.”

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