Northern Rock back in profit for first time since crash
Virgin Money reaps rewards of £750m takeover as combined business edges towards annual profit
NORTHERN ROCK, whose collapse triggered the 2008 banking crisis, is effectively back in profit following Virgin Money's £750m takeover of the "good" part of the failed Newcastle outfit in January 2012.
Virgin revealed the combined business with Northern Rock is on track to achieve an annual profit this year after tipping into profit towards the end of 2012. Before the Virgin Money acquisition, Northern Rock's good bank recorded a £110 million underlying loss.
Since the takeover, Richard Branson's financial services firm has increased net mortgage lending by 14 per cent and added 1.7 million accounts after drawing £710m from the Bank of England's Funding for Lending Scheme to fund the expansion. As a result, The Times reports, Virgin is now the country's third biggest mortgage lender after Barclays and Nationwide.
All 75 of Northern Rock's branches have been converted into Virgin Money stores and chief executive Jayne-Anne Gadhia says Virgin will be able to offer current accounts by the end of the year.
Northern Rock's "bad" bank has been joined together with Bradford & Bingley, which was also nationalised, and is currently being wound down by UK Asset Resolution.