page_title: Nationalisation of Northern Rock
section_title: Eventual return to the private sector
hierarchical_section_title: Nationalisation of Northern Rock / Eventual return to the private sector
caption_attribution_description: English: A branded clock above a branch of the Northern Rock Bank on Northumberland Street / Ridley Place, Newcastle upon Tyne, England in November 2011. The clock became a symbol of the bank when the bank was nationalised.
context_page_description: In 2008 the Northern Rock bank was nationalised by the British Labour Government, due to financial problems caused by the subprime mortgage crisis. In 2010 the bank was split into two parts to aid the eventual sale of the bank back to the private sector.
  On 14 September 2007, the Bank sought and received a liquidity support facility from the Bank of England, as a result of its exposure in the credit markets, during the 2008 financial crisis. On 22 February 2008 the bank was taken into state ownership. The nationalisation followed two unsuccessful bids to take over the bank, neither being able to fully commit to repayment of savers' and investors' money.
  In 2012 Virgin Money completed their purchase of Northern Rock from UK Financial Investments for approximately £1 billion and by October of that year the high street bank operated under the Virgin Money brand.
context_section_description: When the British Government nationalised the bank, they noted that it was to be a temporary measure, and one of their aims was to eventually return the bank back to the private sector. On 26 April 2009, The Times suggested that the Government would sell Northern Rock by the end of 2009. Potential buyers included Virgin Money, National Australia Bank, Santander, Blackstone and TowerBrook. The Times noted that a British supermarket chain, Tesco, was interested in buying parts of the bank. It is thought that adviser Credit Suisse examined the plans to split the bank into 2 parts, to separate the most toxic loans and assets into a "bad bank". In May 2009 the EU demanded more information about the split. Another possibility was a bond debt buyback.
  A spokesperson for the bank said that the sale of the bank was just one option, and there was currently no time scale. Reuters noted that there were considerations to sell the bank, but no formal discussions were taking place with potential buyers. Alistair Darling has stated that he is in no hurry to return the bank back to the private sector.
  In January 2010 National Australia Bank were widely reported to have lined up potential advisers on the deal to buy the Northern Rock. NAB already owned two brands in the UK, Clydesdale and Yorkshire banks. Also in January 2010 Virgin purchased a small bank, the Church House Trust, but according to the Times and other sources Virgin still had an interest in Northern Rock and had been contacting companies such as Blackstone.
  In July 2010 it was reported that a consortium of City executives were gathering to place a bid for Northern Rock using the vehicle NBNK Investments. UKFI have been briefed on the proposals. On 4 November Gary Hoffman left Northern Rock to become CEO at NBNK Investments. Hoffman was put on gardening leave by Northern Rock until he joins NBNK on 1 May 2011. Hoffman was to receive a package worth around £500,000 for his gardening leave, but decided to turn it down. Due to Hoffman's previous position NBNK Investments would not be permitted to table a bid for Northern Rock for a period of 12 months from 1 November 2010.
  In January 2011 renewed speculation about the bank's sale was reported as it emerged that UKFI were beginning to search for both advisers and suitors for the potential sale. On 11 March Deutsche Bank AG were appointed to be the advisers for Northern Rock's return to the private sector.
  On 28 March 2011 the bank announced that it was likely that around 680 more jobs would go during the restructuring prior to the bank's return to private sector.
  On 15 June 2011 it was announced that the bank was to be sold to a single buyer in the private sector by the end of the year.
  On 17 November 2011 the UK Government announced the sale of Northern Rock to Virgin Money for £747m.
caption: The clock outside this branch, on Northumberland Street, Newcastle upon Tyne, is emblazoned with the bank's name and has become a popular image in print and television coverage of the Northern Rock crisis.
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