Tuesday 1st April 2008
The debt owed to the Bank of England by Northern Rock is to be cleared by 2010, under the terms of the financial services providers new business plan.
As part of its aim to return to its previous status as a standalone company - and emerge from its current publicly-held condition - Northern Rock has set a deadline of the end of 2010 for its debts to the Bank to be repaid.
Subsequent years also have their own targets set, with 2011 due to see the HM Treasury guarantee arrangements released and Northern Rocks overall balance sheet to be cut by more than half by the end of the year.
From its previous figure of £107 billion in 2007, the lender anticipates its balance sheet is to be reduced to a more manageable £50 billion by the end of 2011.
By 2012, meanwhile, retail deposits are to represent about half of all the funds at the financial services providers disposal as it seeks to put in place a more robust strategy.
Executive chair Ron Sandler comments: "We have developed a business plan that we believe will help drive the bank back towards profitability and ensure it has a sustainable future and remains an important employer in the north-east."
Financial figures from Northern Rock show that it has already repaid some of the funding extended to it by the Bank.
Compared with a level of £26.9 billion at the end of December 2007, the lending obtained from the Bank now stands at closer to £24 billion.
A statement from Mr Sandler on the Northern Rock website explains that, by restructuring as a "smaller, more focused, financially viable mortgage and savings bank" the lender hopes to repay its debts "as quickly as possible".
©
Everything on preparing your finances for your children's futures. From Child Trust Funds through to tax planning. Request your FREE brochures here.
