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Yorkshire says it could make a bid for the Rock

Yorkshire Building Society has revealed it is interested in bidding for Northern Rock plc when it is eventually put up for sale.

YBS chief executive Iain Cornish says the state-backed bank should be remutualised. In August 1997, Rock ann-ounced it was going to demutualise in order to gain access to cheaper money on the capital markets.

The bank was bailed out by the Bank of England in September 2007 following the collapse of the wholesale markets, on which it was almost entirely dependent for funding.

Cornish says: “We think Northern Rock should be remutualised and there are a number of ways that can happen. But if it is going to be remututualised, we think that we would be a credible potential partner.

“It has not yet been put up for sale and therefore there is not yet an opportunity to formally express an interest but if that happens, we would want to look at that opportunity seriously.”

Last Month, Coventry Building Soc-iety revealed it is also interested in bidding for Northern Rock’s “good bank” when it is put up for sale.

At the Building Societies Association annual conference in Birmingham last week, the trade body also called for the troubled lender to be remutualised.

But Leeds Building Society chairman Robin Smith said it is “unlikely” that Rock will return to the mutual sector.

He said: “It would be a huge acknowledgment that the big demutualisations of the 1990s were a major strategic error. One of the frustrations I have had is that the Government will never articulate that view.”

London & Country head of communications David Hollingworth says: “There are only a small number of building societies that would be able to take on Northern Rock.”


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