Clients line up for funds at Northern Rock

Clients line up for funds at Northern Rock

Agencies / London September 17, 2007

The stock of Northern Rock Plc, the UK mortgage lender bailed out by the Bank of England last week, tumbled to a seven-year low in London today after customers lined up at branches across the country to withdraw savings, according to a report on the website of Bloomberg.

Shares of Newcastle-based Northern Rock fell 34% to 290 pence as of 8:10 am in London leaving the fourth-largest UK mortgage company with a market value of 1.2 billion pound ($2.4 billion), the report said.

Hundreds of clients ignored assurances from chief executive officer Adam Applegarth and UK Chancellor of the Exchequer Alistair Darling that their deposits were secure after the biggest rescue by the central bank in 30 years. Savers removed at least 2 billion pounds ($4 billion), or about 8% of Northern Rock's total since September 14, British Broadcasting Corporation reported without saying where it got the information, the report added.

A report on the website of Financial Times quoting people familiar with the matter said the bank and its advisers were planning a new push to find a "commercial solution" that would allow it to be sold as a going concern.

Northern Rock held talks with Lloyds TSB, the UK