Northern Rock sees mass of withdrawals
September 29, 2007
Troubles bank Northern Rock has seen a stampede of customers flock to its branches over the past few days, with worried savers desperate to clean out their savings account due to worries that the bank may go under.
Both government officials and officials from Northern Rock have assured the public that there is nothing to be concerned about and that the company remains solvent, but this has done little to alleviate the dears of the bank’s 1.5 million savers after it was discovered that the bank had to take a £30 billion loan from the Bank of England.
Between Friday and Sunday savers with the Northern Rock had already taken out £1.5 billion in savings, and many are continuing to flock to the branches in order to take out their savings. Government and industry officials have described Northern Rock as a ‘sound financial institution’ and have assured customers that the Bank of England would not lend to a business that was about to go bust. However, some experts now think that customers’ reactions to this loan could put an end to the bank due to the level of savings that are being withdrawn.
Northern Rock shares have plummeted since Friday, and branches have had to stay open late with staff working all hours to deal with the number of customers queuing to make withdrawals.
One spokesman from the bank stated: ‘I am sorry, because the level of service our customers are getting is much slower because we are extremely busy. I would ask customers for their patience. Our staff in branches and manning the phones will give customers their money back if they want it. Several branches stayed open until 10.30pm last night, and many will stay open tonight, too, if necessary. If customers still want to withdraw money when we reopen on Monday, they can do. But I can assure them that this business is solvent.’
Alan Wright
29th September 2007
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