Northern Rock

[smurfchops]

My mother doesn't have a mortgage with Northern Rock but has Silver Savings and a couple of Bonds. Would she lose her money if they go bust ?? Thanks.

[BigMac]

It's a bit early to worry about it going bust - the intervention by the Bank of England is intended to prevent that; Northern has a sound loan book, apparantly.

However, I believe that there is a finanacial services compensation scheme that will pay. The maximum levels of compensation are: Deposits: �31,700 per person (100% of the first �2,000 and 90% of the next �33,000). So she might get that maximum amount but not for each acount/bond.

Full/better details can be found at: http://www.fscs.org.uk

[Twenty20]

It's far more likely that Northern Rock would get bought out by another bank. There's already been approaches apparently.

[filthiestfis]

I have applied for a loan with them. Im awaiting a response from them. Should I go ahead if they accept my application?

[smurfchops]

My mother has over �60,000 in a fixed rate bond, should she be worried? I think she is writing to them to ask them to cancel the bond, is it likely she will get her money ? Sorry to sound so negative !

[LostSheep]

Taken from - http://news.bbc.co.uk/1/hi/business/6994160.st m

Should Northern Rock customers panic?

Experts say that Northern Rock is still a profitable and viable business and that there is little prospect of it going bust.

People who have saving accounts with Northern Rock probably don't need to panic, said Angela Knight of the British Bankers' Association.

The message from the government and others is that the very fact that the Bank of England has agreed to provide emergency funding was an indication that it believed the problems at the Northern Rock were temporary.

[factor-fiction]

Most firms, including successful ones, borrow money from time to time for cash flow reasons.A bank is no different. It happens rgularly even for banks. Bank of England wouldn't lend money if it didn't expect to get it back. If the panic continues Monday I'd buy some Northern Rock shares 'cos they will be fine by next month.

[Oneeyedvic]

factor30 - they have fallen by 31% on Friday - but it may interest you to know that they had already fallen by almost 50% since February of this year.

The current share price is �4.38 (they closed @ �6.39) on Thursday night. In February of this year they were �12.58.

Did you buy a load last week saying the same thing?

I know a fair few people who have more than �32,000 in there who will be moving it over the weekend.

[neo.]

Nrock shud recall the mortgages of those who remove their savings

[factor-fiction]

Oneeyedvic- I agree it's better to be safe than sorry - and moving any savings out over �32000 is a good idea provided they don't have to pay a penalty for lack of notice- and don't get a lower rate of interest.. A UK bank like this if it really gets into trouble will have lots of banks wanting to take it over- the banks want to get hold of the customer base.
My comment on share prices is just my view- no-one knows for sure- I think just because the price has fallen doesn't mean it will fall even further. The price was overpriced a year ago. Let's review position in mid October and see what the share price is then. We'll both post our thoughts on 15th October- okay?

[smurfchops]

Easy to say Don't Panic if you don't have any money in there !!

[Maggoty]

Also - aren't Northern Rock still a building society?? If they get taken over by a bank then there will be a windfall for its customers