any comments, thoughts, on this stock.

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.

Webb site now innoperative to anyone with savings trying to access over net.

A billion pounds worth of nrk traded today, interesting how it evolves next week, wonder if it will make the weekend papers!

Falcothou
Could be in the Sun.

Interesting post Alan and full of common sense as usual. It irritates me to see on the news tonight (and I have no personal interest in NRK as either depositor or borrower) the Chief Exec bleating on about their solvency and being a well run bank, when in fact he should imo be resigning for gross negiligence in not being sure of funding other than on what appears to be a day to day basis. If NRK was not a major lender affecting the lives of many voters, but say an ordinary large manufacturing business, imo there would have been no Bank of England bale out and the receivers would probably have been in today.

Down 30% today, is it worth a small punt now ?

Possibly yes but wait to see the market reaction to the weekend media. NRK's funding strategy has proved to be totally vunerable to recent tightening in the money market. They increased their mortgage lending not by increasing their share of customer retail deposits but by taking the easy route by borrowing from the money market which as we know has at present dried up. Will they be able to maintain the dividend? Future forecast growth has flown out the window as fast as depositiors take their money out the door .It is after all about how confident you feel that the management know what they are doing.

No its not a buy..
tonight from tomorrows torygraph.... 2bn taken out today alone... and customers only guaranteed up to 31,700 back.....
No doubt its depositors (of which there are rather too few) are covered by the Financial Services Compensation Scheme to the tune of 31,700 per person (100pc of the first 2,000 and 90pc of the next 33,000). If most of its mortgage assets are good (albeit unprofitable, given Northern Rock's funding costs), they will find willing buyers among the remaining viable mortgage lenders.

Northern Rock's shareholders would, of course, lose everything and the remaining creditors (including depositors with balances in excess of the deposit insurance limit) would have to wait to see how much the realisation of the assets generates.

I agree it is not a buy, and a very bad business model.
but it is worth remembering that the emergency funding the BoE put in place has not been drawn down, and as long as savers do not entirely empty the coffers, never will be.
The money is available to meet the FSA liquidity requirements, not to hand out to mortgage borrowers, and providing NR make their mortgages unattractive for a while it will not be needed.
The answer for NR is to stop buying money from the market, and start offering attractive long term investments at fixed rates.
Traditional old fashioned banking (though I hate to sound like Mr Darling).
Or put another way, redress the imbalance between depositors and borrowers.
Alan

Just say No..!

NRK is a disaster...very poor management...CEO Adam Applegarth should resign immediately.

Agree with you there hlyeo hes the one that got it wrong he should go...with a huge wad of course..

but more interesting is to ponder whether or not NRK is now worth a punt with the predators clearly circling

Tricky. Presumably any preditor will need a lot more cash than the cost of the takeover as the BOE is unlikely to offer any kind of safety net once the deal is done. They'd also need to rebrand pretty quickly as the name is rather tainted now with all the press coverage.

It'll be interesting though to see which banks still have plenty of cash in reserve, and more importantly if anyone decides not to bid after looking through the books.

In my opinion.....

Strawbs.

anyone shorting Investec?...they bought Kensington group

Interesting point cynic / strawbs.
I have no doubt the vultures have scented a carcas for picking off, but the wisdom of such a move may be questionable.
NR's problem is that it has the infrastructure and depositer representation of a provincial, but it is number 5 in the mortgaging stakes.
In effect, any buyer would be buying a large and unprofitable mortgage book at a time when mortgages look less than secure, but very little in the way of assets, other than shaky security.
It would rather depend on the buyers ability to leverage the existing client base into a broader range of product, instead of the usual round of cost cutting / savings / economies of scale route to profitability.
The other banks were unwilling to lend at LIBOR, so would they be wise to take the debt on at an average less than that, when the extras that come with it are vanishingly small by comparison?
If a bid comes, I think it would have to be very low to be economic to the bidder, and therefore unattractive to NRK holders.
Obviousley I cannot see the current books of NRK, so it is just musing on my part.
Alan

Possibly the other UK banks are taking advantage of the situation to knock a troublesome rival out?

At the moment it can't trade and is in effect worthless - without the continuing bailout by the taxpayer I would be surprised to see the shareholders get very little or even nothing at all.

Loans of 125% based on house prices which, outside of London and the SE, are falling? Would you buy it?

Presumably if a bid occurred small shareholders would be last in the rumeneration stakes, depositors and institutions taking the lion's share