Cloud over Rock’s ability to repay BoE loan
Clouds hang over Northern Rock’s ability to repay the £23bn of taxpayers' money it ows the Bank of England
Clouds hang over Northern Rock’s ability to repay the £23bn of taxpayers' money it ows the Bank of England
In all £53bn worth of
Northern
Rock’s mortgages – more than 70% of its mortgage portfolio – is owned by a
Jersey-based trust company, which leaves a huge hole in the pool of assets
available to provide collateral for its creditors, including the Bank of
England, The Guardian reports after an examination of Northern Rock’s
books.
The same investigation reveals the troubled bank is extremely vulnerable a
slump in the property market and calls into question
government
claims that taxpayers’ money is safe.
Among the findings are mortgage loans of more than 90% of the purchase price
of a house over three years have soared to £16bn – up from £2.7bn; loans have
exceeded the value of the property on nearly 2,500 mortgages, valued at £263m,
up from £13m on 158 properties three years ago; 10,000 Northern Rock customers
are a month or more in arrears on their mortgages, on loans worth nearly £1.2bn
compared with 2003, when only 2,500 were in the same difficulties, involving
mortgages worth £168.8m.
In 2003 Northern Rock repossessed 80 properties. Last year more than 1,000
properties were repossessed. By the end of September, 912 properties had already
been repossessed.
Further reading:
Northern Rock sale faces Treasury veto
Rock FD survives board clear out
In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...
View resourceIn recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...
View resourceIn a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...
View resourceThe first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...
View resourceFrom battling underground invoice frauds in China to navigating bribery risks in the Middle East, Mazars' Nigel Layton shares essential insights on co...
View articleAccording to the Chartered IIA, internal audit should be placed at the forefront of a new Code Read More...
View articleBy switching the focus from ‘profit made for investors’ to ‘value created for all’, accountants can find ways to quantify and evaluate the impact of a...
View articleThe proposals form part of an ongoing overhaul of audit and corporate governance in the UK Read More...
View articleThe first update to the UK Corporate Governance Code in four years will see the creation of a stronger framework for reporting on internal controls an...
View articleBusinesses must adopt a healthy corporate culture or risk legal and business consequences Read More...
View articleDuring a conversation with Accountancy Age, Mazars partner Bob Neate breaks down the draft audit reform bill, warning of a potential capacity issue fo...
View articleThe FRC and major audit firms have criticised the UK government’s watered-down proposals Read More...
View article