any comments, thoughts, on this stock.

yes and the big boys may well be dividing up the spoils when a bidder comes in. The business method has been left wanting and company will be ripe to consolidate into a larger bank with a more conservative approach. Short term there is a confidence crisis with depositors which is aggrevating the situation.

Maybe one for Barclays as RBS looks more likely for ABN. Could be worth a punt soon.

The problem is if the news reports a mass exodus by its customers before a buyer comes in, what then with the sp.

From their Web Site.

Welcome to Northern Rock Specialist Lending.
We can now offer you and your clients a full range of sub-prime mortgage products from Niche Prime to Unlimited a wide choice designed specifically to meet all of your needs.

NEW! Sub-Prime product range launched offering a free mortgage valuation complimenting our existing range of products.

Given that NRK assets are essentially standard mortgages, their book should be reasonably clean and the likes of Barclays must be salivating at the prospect of picking it up dirt cheap - always assuming the ABN deal goes away and Barclays does not have too many skeletons itself in the Barclays Capital cupboard. Borrowing short and lending long has always been trouble - why do people think they are cleverer now than in previous generations? Just shows that it is cash (or lack of it) rather than profit (or lack of it) which causes businesses to fail.

Any bank would have to be foolish to rush in and bid for NRK before the sub prime/liquidity problems are resolved. Personally I think both Barclays and RBS will withdraw their offers for ABN which would be sensible till the "dust" settles.

NRK shares likely to trend lower after this weekends press reporting especially if there is a "run" on the bank as depositors seek safer havens for their funds.

no one will buy NRK at the moment......they are in trouble because the rates they have to borrow at to cover their lending is higher than the what they are charging their customers....hence the reason they are in trouble in the first place......and with everyone rushing to withdraw cahs today...this will be even worse...then add onto the fact no one will take out a new mortgage with them...people will be in the process of starting to swap out today.

all that is going to happen is the other banks will offer NRK's customers a good deal to swap over.........why would anyone buy them now?

Today's falls just the start of it I think

Driver,
The sub prime stuff they do is merely as a broker for Lehman Bros.
Not their money at all, so not as daft as it seems.
Alan

Northern Wreck is a sell to 250p.

?

What would the P/E at that price be mitzy ?

their historic p/e is of no bearing now

Quite right yesterdays profits tomorrows losses.

Al
Yes you could be right NRK were on the radio this morning saying just that, but then there was some callers disputing this with documented evidence so who knows.

The Rock has completely shattered into smithereens...


Bank offers emergency support to Northern Rock
Fri Sep 14, 2007 10:38 AM BST

By Steve Slater

LONDON (Reuters) - The Bank of England has offered an emergency loan to Northern Rock after the mortgage lender became the biggest British casualty of the credit squeeze sparked by the crisis in the U.S. subprime mortgage market.

The central bank's support -- the first time it has acted as lender of last resort in this way since becoming independent on interest rate policy in 1997 -- puts a prop under Northern Rock, which has been hit by a spike in the cost of borrowing from other banks as they become increasingly reluctant to lend.

The government said on Friday it had authorised the Bank to provide an unspecified amount of liquidity to Northern Rock, the country's eighth-largest listed bank, which had the biggest share of the new mortgage market in the first half of this year.

The Bank, which has come under fire from some financial institutions for its hands-off response to market turmoil, said Northern Rock was solvent and only in need of short-term help.

But queues formed outside some branches of the Newcastle-based bank, as customers looked to withdraw deposits.

Chancellor Alistair Darling told BBC Radio that Northern Rock was the only institution to have called for Bank aid and that the economy and banking system were sound.

"There is plenty of money in the system, the banks have got money ... they are simply not lending in the short-term way that institutions like Northern Rock need," he said.

While it has no exposure to subprime loans, Northern Rock has proved vulnerable to the liquidity squeeze triggered by the U.S. subprime lending crisis because it has a small deposit base and so has to draw most of its funding from money markets.

Interbank lending costs rose to their highest level for nine years this week as banks scaled back lending to each other.

Northern Rock declined to comment on the details of the financial support, though Chief Executive Adam Applegarth told reporters that "clearly a substantial amount is required" and that it would be charged a penalty interest rate.

The firm warned higher funding costs and a decision to rein in lending would hit profits this year and next, and that there could be job losses among its 6,000 staff. Its shares, already down almost 50 percent this year, plunged a further 25 percent.

"The only potential short-term fillip for the share price would come from an acquisition by a bank with the capability to fund the business on an ongoing basis or a stabilisation of the credit markets," said Landsbanki analyst Ian Poulter.

"EXTREME CONDITIONS"

Other banks, like Barclays, have obtained overnight funding under the central bank's standing emergency lending facilities. But the package for Northern Rock was the first time the Bank has been called on for longer-term help during the current crisis.

The Bank made it clear earlier this week that it would not bail out insolvent companies and has come under fire from some institutions for making less money available than other central banks, such as the European Central Bank.

The Financial Times Deutschland said on Friday, without identifying its sources, that some large British lenders were borrowing cash from the ECB via subsidiaries because of the Bank of England's reluctance to lend.

At 10:10 a.m., Northern Rock shares were down 21.8 percent at 500 pence, valuing the bank at about 2.2 billion pounds. Shares in rival mortgage lenders Alliance & Leicester and Bradford & Bingley fell over 7 percent each, while buy-to-let lender Paragon fell over 20 percent.

Bradford & Bingley said it was well funded for the next half year. Alliance & Leicester and Paragon declined to comment.

Northern Rock's Applegarth urged customers to remain calm.

But more than 20 people were queuing outside the bank's Moorgate branch in London, looking to withdraw money.

"I'd rather take my money out, just to be safe," said Steve Dixon, a customer at that branch.

Applegarth said Northern Rock, which used the cheap borrowing costs of recent years to expand aggressively, would emerge a different bank.

"Our mix of funding will change going forward. Will we have greater dependence on retail deposits? Yes. Will we be growing slower? Yes. It will be a different Northern Rock, we will evolve to adapt to the market conditions," he told reporters.

Northern Rock said it now expected an underlying 2007 pretax profit of 500 to 540 million pounds, compared with analysts' current consensus forecast of 647 million.

(Additional reporting by Jonathan Cable, Marc Jones, Dan Lalor)

There are rumours that Bradford and Bingley will suffer the same fate as the Rock. Sell!

Some customers are queuing outside Northern Rock branches today



But experts say it does not mean Northern Rock, which has 113bn in assets, is in danger of going bust.

Driver,
I got a beasting last week when I passed on information from Lehman Bros. that they were withdrawing their most risky lending and repricing the and reunderwriting any new lending.
I was told I was a scare monger!!!
Now we see why!
It is a very poor state for such a high street bank to be in, but I sincerely doubt it has much to do with sub prime, and is more about the mortgages and even unsecured loans NR were offering last year at just 4.99% fixed for up to 15 years.
When one considers that it is now losing money on these deals and cannot offload them without taking a huge hit, and that it had the loosest underwriting of any major lender (possible exception - Yorkshire Bank) It was always going to make it big while cash was readily available and be the first to be hit during tighter times. Sub-prime is not the cause - it is the precipitator.
Next to go?
Dunno, but it will not be the majors, it will be a local, but publicly owned bank.
The mutuals are safe. The bigger players take a more global view, and have had strict underwriting for some time. B&B should be fine as they are less of a lender and more of a broker, playing with other peoples money.
It will not though, be the last.
Wednesday saw a subprime lender (victoria) in administration.
Today sees my inbox full of notifications from many lenders about rule and rate changes, all to make lending less desirable and more difficult, and increasing set up and application fees.
These guys can no longer follow the model of lend out money, flog the debt on and move on. They are left with tough to sell debts and therefore they now take their own risk, which they are pricing in.
The telling time for these guys is 9-12 months from now. That is when I expect the real casualties.
Alan

Bradford & Bingley on the list soon

No need to worry about pe's Annie thats in the past.