UKFI has confirmed the intention to integrate Northern Rock and Bradford & Bingley under a single holding company.
The body set up by the government to manage the public stakes in the banks says the proposal will maximise value for the taxpayer and create a solid platform for the orderly management of both companies’ closed mortgage books. However, it says there is no firm timetable for the integration.
It is proposed that a single holding company will combine Northern Rock (Asset Management) and B&B under common governance and management.
Both companies will remain as separate legal entities under the new holding company, each with its own balance sheet and government support arrangements.
There will be no changes to existing liability structures and customers do not need to take any action. The proposal will be implemented within European Commission State aid rules and will be subject to regulatory approval from the FSA.
Keith Morgan, Head of Wholly-Owned Investments at UKFI, said: “We believe that bringing these businesses together under a single holding company with a common management team is the natural outcome and the right solution to maximise value for the taxpayer. NR(AM) and B&B are now similar companies and operating under this new structure will help deliver efficient management of both companies’ closed mortgage books.””