Can the Rock win over consumer confidence?
March 26, 2008
Since the crisis that surrounded Northern Rock last year, when it was discovered that the Rock had taken an emergency loan from the Bank of England, things have gone from bad to worse for the stricken lender. First share prices plummeted, then customers withdrew over £2 billion in savings over the space of a few days amidst fears that the bank was on the verge of collapse, and then talks with private buyers relating to the sale of the bank proved to be fruitless.
It was hoped that the recent nationalisation of Northern Rock, which has passed temporarily into public ownership, would result in a brighter outlook, and the Rock has been offering some tempting deals on savings interest rates since its nationalisation. However, it seems that customers are still wary about putting their hard earned money in the bank, despite some experts stating that its nationalised status makes it a far safer bet, and despite the government’s 100% guarantee on the first £35,000 of savings.
One industry professional recently stated: ‘The wounds of those affected by the Northern Rock crisis – all those that spent days and weeks fretting over whether they still had any savings left – are still pretty fresh, and it is going to take some time to rebuild trust in Northern Rock, even if it has been nationalised.’
A consumer that was asked whether he would consider putting his savings into the newly nationalised bank said: ‘The savings rates look good. But I won’t invest with Northern Rock. I’m mildly worried. It might be illogical but I’m still uncertain about Northern Rock. It could be that I don’t really trust the Government and Alistair Darling.’
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