PricewaterhouseCoopers saw its fees for Northern Rock in 2007 increase by more than a third as the troubled bank was forced to go cap in hand to the government for emergency funding.
PwC earned £1.8m in 2006 and £2.4m in 2007, Northern Rock revealed today as it released its annual report.
The audit fee for 2007 of £1m was double the £500,000 paid in 2006. PwC picked up £400,000 for non-audit services in 2007. The rest of the fees paid to the firm were for work on auditing Rock subsidiaries and advice on interim management statements.
But the audit fees were just a small portion of the huge amounts paid to advisers by the bank, as it attempted to find a buyer before it was eventually nationalised.
Northern Rock paid £21.2m in fees to advisers and also had to pick up the bill for £12.5m fees incurred by the Tripartite authorities as they worked through the best way to save the bank.
Former finance director, Dave Jones, was paid £390,000 in 2007. He has since been replaced Ann Godbehere.
The accounts showed that Northern Rock had suffered a loss of £199m in 2007 compared with a profit of £443m in 2006. The bank had to book a £471.9m impairment charge on loans and advances and unsecured loans.
PwC warned that the situation could get worse for the bank in its audit opinion on the 2007 accounts.
PwC did not qualify its opinion but said there was 'material uncertainty' about the Rock's ability to continue as a going concern as the business is reliant on a Bank of England loan facility which still needs to be cleared by the European Commission for State aid.
'These outstanding clearances indicate the existence of a material uncertainty which may cast significant doubt about the company’s ability to continue as a going concern. The financial statements do not include adjustments that would result if the
Company was unable to continue as a going concern,' the auditing firm said.
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