Member Article

North East banks 'not for sale'

Neither of the North East’s two big banking institutions are currently up for sale, despite reports to the contrary.

Earlier this week speculation began on Chancellor Alistair Darling’s plans to sell nationalised lender Northern Rock. At the same time the Newcastle Building Society has denied rumours that it was to be taken over by the Skipton Building Society.

It was claimed on Monday that Alistair Darling’s Treasury paper on banks and regulation, expected tomorrow, will include plans to increase competition in the sector by selling Northern Rock to a new player in the mortgage market.

But a Treasury spokesman said: “We have always maintained that any future sale would need to clearly demonstrate value for the taxpayer and maintain financial stability, and therefore that any future decision will not be rushed.

“At this point, Northern Rock has successfully paid back a large portion of the Government’s loan and has recently committed to lend more to those seeking mortgages.”

Meanwhile, the Newcastle Building Society has denied reports it was in talks with larger rival Skipton about a takeover.

Newcastle Building Society chief executive Colin Seccombe said: “We are unaware of the origins of this story but can say that it is simply not true. We are not in takeover talks with either the Skipton Building Society or any other organisation, would not welcome any such approach and do not believe that such a situation would be beneficial for our members, our commercial partners or our staff.

“We have weathered the recent global financial turbulence well, and are experiencing extremely strong retail inflows.

“Newcastle Building Society’s finances are fundamentally sound.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .