Michael Taylor
Editor of North West Business Insider
In Focus: The big sell-off
The Northern Rock sale is a test of bigger auctions to come, says Michael Taylor.
Chancellor George Osborne used his Mansion House speech last night to announce the sell off of Northern Rock. The mortgage and savings business was nationalised by the last Labour government as it was engulfed by bad loans and liabilities.
The likely sale price is expected to be around £1bn, which is a tiny proportion of our money to recoup. But the importance of it is that it represents a clear signal that the government's stakes in Royal Bank of Scotland and Lloyds Banking Group will be next. Already RBS has been disposing of assets - the sale of commercial banking to Santander is a process that is currently underway.
Osborne said any interested parties can bid for it, including mutuals, potentially opening the way for The Co-operative Group.
The government will not be selling Northern Rock Asset Management, the separate “bad bank”, whose assets are being run down over time, he said.
He said: "But the independent advice I have received is that a sale process is likely to generate substantially the best value for the taxpayer and should be explored as a first option.
"And it would be a very important first step in getting the British taxpayer out of the business of owning banks – and a sign of confidence in the industry," he said.
What is significant is the option of selling shares in Northern Rock has been ruled out. He wouldn't like the embarrassment of a poor take up.
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About Michael
Michael Taylor joined Insider in 2000 when he became editorial director. He has been responsible for overseeing the significant growth of the editorial division in this time.
Michael has played a major role in the development of Insider events, insiderbusiness.tv and is a regular contributor to BBC Radio Manchester. During his tenure as Editor of the multi-award winning North West Business Insider Magazine he has made the magazine market leader in the North West.
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