Virgin Money is buying Northern Rock for £747 million
Bank collapsed four years ago and was taken over by UK government
Northern Rock expects to return to profit in 2012 for first time since crisis
Virgin Money, Richard Branson’s banking arm, is buying Northern Rock for £747m, almost four years after the bank collapsed and was taken over by the UK government.
The Treasury said the sale was expected to complete by the end of this year, subject to regulatory clearance. It said the deal could eventually be worth more than £1bn.
Virgin has committed to maintaining Northern Rock’s operational headquarters and said there would be no further compulsory redundancies, beyond those already announced by the company, for at least three years. The lender will be rebranded as Virgin Money.
Ron Sandler, executive chairman of Northern Rock, said in a statement: “The return of Northern Rock to the private sector has always been one of our key objectives. We said that this would be done at the right time and when there was a proposition in the best interests of taxpayers and other stakeholders. I am delighted that we have reached an agreement with Virgin Money which successfully delivers that.”
As well as Virgin, Northern Rock had also attracted interest from NBNK, the banking venture set up by Lord Levene, and JC Flowers, the private equity firm.
Northern Rock said in August that it expected to return to profit in 2012 for the first time since the financial crisis.