Bank. Northern Rock Building Society was formed on 1 July 1965 as a result of the merger of Northern Counties Permanent Building Society (established in 1850) and Rock Building Society (established in 1865). After such time, Northern Rock Building Society merged with a number of small local building societies and, prior to its conversion to a public limited company in October 1997, was an amalgamation of 53 societies. The most significant development in the recent history of Northern Rock was its conversion on 1 October 1997 from a building society to a public limited company, listed on the London Stock Exchange and authorised under the Banking Act 1987. The conversion also resulted in the establishment of The Northern Rock Foundation, a charitable body which is entitled to receive approximately 5% of the annual consolidated profit before tax of Northern Rock plc.

            Red = 25 day moving average.           Green = 200 day moving average.

Daily Telegraph - 03/10/2006

The Questor column - By James Quinn


Despite the price slide, a stout mortgage market makes this Rock as solid as ever

Northern Rock
Stock: 11.58 -10p
Questor says Hold for now

To the frustration of would-be first-time home buyers, most crystal ball gazers believe Britain's mortgage market remains sickeningly healthy. This is good news for Northern Rock, the Newcastle-based dynamo which churns out mortgages to its British customer base.



Northern Rock financials

Yesterday it reiterated its bullish forecast of about 20pc growth in profits this year. While Rock is growing fast, it makes a virtue of the fact that it still only has 7pc of total outstanding mortgages, enabling it to cherry pick customers.

But it has also answered critics that it is only interested in loans to mainstream people with good credit histories. In the summer, it unveiled an deal with Lehman whereby Rock is paid for introducing "sub-prime" business to the giant US bank.

The beauty of the deal is that while this segment of the population is lucrative- because higher fees can be charged, if customers go under it is Lehman that will have to write off any losses. Due to its superior management and lean structure, Northern Rock trades at 13 times future earnings, a significant premium to its sector.

As chief bean counter Adam Applegarth and his team keep on exceeding expectations, this premium may seem justified. But there are questions about what the future holds for Rock. Mr Applegarth is only 44 and may want to do something else. In addition, speculation that Rock might be caught up in the much talked about consolidation of the UK banking sector will not go away. A takeover of Bradford & Bingley is favoured by some analysts for the cost cuts it would create. The rise in Rock's shares has been precipitous. Yesterday they slipped 10p to 1158p. Buy if they slip further.

AFX - 20 October 2006

LONDON (AFX) - The UK's Office of Fair Trading said it plans to refer the market for payment protection insurance (PPI) to the anti-trust watchdog, arguing that a lack of competition between PPI providers results in poor value for consumers.

The move marks a setback for the UK banking industry, which generates large profits by selling payment protection policies, designed to keep up debt repayments if borrowers lose their income.

Unveiling the conclusions of a six-month study of the PPI industry, the OFT said there is 'little competitive pressure' in the market because consumers usually buy PPI from the same bank that is lending to them.

'Following the work we have undertaken it is clear that many consumers are failed by PPI - insurance which gives them a poor deal and often less protection than they think,' OFT chief executive John Fingleton said in a statement.

'There is limited evidence the industry is taking steps to improve the situation, but we believe they will not make major improvements to competition in the market,' he said.

The OFT is publishing its report today, and will hold consultations with banks and consumer organisations before reaching a final decision on whether to refer the PPI market to the Competition Commission early next year.

The Commission could ultimately impose price caps on PPI, making it less profitable for the banks.

According to the OFT, PPI generates revenues of about 5.5 bln stg for the leading UK banks every year.

Analysts say the banks that generate the most profit from PPI, and that have the most to lose from a clampdown on the sector, are Lloyds TSB Group PLC, HBOS PLC, Northern Rock PLC, and Barclays PLC.

The OFT launched its investigation in April in response to complaints from consumer groups that PPI is too expensive and is frequently mis-sold as a result of high pressure sales tactics.

Any thoughts on support level for this one now?
Historically, 700p looks to be where this is heading.

750

750p looks to be a weak support level. 700p imo, but I may be wrong.