No Northern Rock share dividend payout
May 22, 2008
Troubled high street lender, Northern Rock, has recently announced that it will not be paying out any share dividends to shareholders. The announcement follows the recent turmoil, which saw many of the bank’s 1.5 million savers draw out billions of pounds in savings amidst fears that the bank would fold after it took a loan from the Bank of England. Northern Rock is the fifth largest mortgage lender in the UK, but despite its past success and also despite assurances from bank officials and the Bank of England, savers flooded to branches in droves for a number of days in order to take out their savings.
The lender was due to pay out dividends to shareholder in the coming month, but after the recent turmoil and the need to borrow money the government was not happy with this. One official stated: “The Treasury was deeply unhappy about Northern Rock paying a dividend at a time when the government has been forced to underwrite all deposits and loans to Northern Rock.” Officials from the UK Shareholders Association expressed disappointment about the decision, stating that: “Many shareholders were persuaded to invest in shares in the company in recent months based on the apparent strength of the business when in reality the company was in great financial difficulty”.
Northern Rock has also revealed that it is in talks with various parties in relation to the sale of some or all of the business, but has confirmed that there is nothing firm in place at present. One bank official stated: “The company has received a number of approaches regarding a variety of potential transactions.” Share values in Northern Rock have plummeted since its approach to the Bank of England became public knowledge.
Related Articles
- Northern Rock in talks over selling business Troubled mortgage lender Northern Rock has announced that it is currently in talks with potential buyers with regards to the possible sale of the business. The
- Can the Rock win over consumer confidence? 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
- Ridley gets no payoff from the Rock Northern Rock, the stricken High Street bank that went through a period of turmoil recently, has recently announced that it will not be offering any
- Ridley quits Northern Rock Following a period of turmoil and chaos the chairman of troubled bank, Northern Rock, has quit his £315,000 a year job, which he has held
- Northern Rock staff receive generous bonuses As talks about the future of the stricken bank Northern Rock continue staff members have been awarded a pay rise, as well as one off
Comments
Got something to say?