any comments, thoughts, on this stock.

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

Bid - Unlikely apparently!

Robert Peston, is the BBC's business editor. This blog is his regular take on the business stories and issues that matter

"Rock can't be sold"
Robert Peston 16 Sep 07, 09:29 AM

For all the talk including by me (see my earlier comment, "Rock or Crock) about how Northern Rock must surely soon find itself under new ownership, I have learned that it cannot be taken over by another bank in the absence of a major policy shift by the Bank of England........
.......
............So here is the choice that may confront the Bank of England and the Chancellor of the Exchequer soon.

They could choose to continue along the path they have taken. This could see them injecting many many billions of pounds into Northern Rock for an indefinite period. They would in effect be choosing to enter the mortgage business and Northern Rock would almost be nationalised.

Over time, Northern Rock would probably wither as a business, to the detriment of its many employees.

Or the Bank and Chancellor could grit their teeth, swallow their pride and allow public funds to facilitate a takeover.

I cannot predict which way they will jump. When I interviewed the Chancellor Alistair Darling yesterday, he evinced great confidence in the actions of the Bank.

That said, in all the turmoil and uncertainty, Northern Rocks share price is probably still heading in a direction that will not amuse its shareholders.

http://www.bbc.co.uk/blogs/thereporters/robertpeston/2007/09/rock_cant_be_sold_1.html

More falls tomorrow then what are investors thinking..?

If somebody came along and said "we'll take the risk off your hands" I can't see the BOE turning them down (providing any borrowing is paid back). I suppose it would also depend on the quality of the buyer. They wouldn't want to create a bigger mess by letting it go to someone without deep pockets....

Either way I'm not sure it would be wise to buy on the hope of a takeover. Would anyone pay a premium in the current market? Doubt it. The other danger comes from the price being pushed up on speculation and short covering, only to tank again when some new bad news appears. You only have to look at a few charts to see that most shares that slide heavily don't bounce back much (although some profits might be made for the brave). Personally I'd avoid. If we see any other banks in trouble, or the bank reporting season in the US uncovers some big losses, then the sector will no doubt get slapped again.

In my opinion....

Strawbs.

The future looks bleak Strawbs..

I would not be surprised if we see a takeover very soon. It is probably being hammered out over this weekend. The authorities will not want this situation to fester in view of the risk the lack of confidence will spread. The majority of the NRK withdrawn money will probably find its way to the main clearers and it is ironic that some of these funds will be buying up NRK at distressed levels. The Company may be bought out via an all share issue of the predator Bank if terms are suitable more to the acquirer than NRK. Again, ironically, funds may then flow back in. As for the current NRK sp, they may well retreat further but, I am getting near to taking a punt.

As a punter who sold his NRK 4 hours before the loan was announced to the general public, I feel mighty relieved.

And no I did not know this was coming I felt uneasy with the holding so sold it..

Here is the lates news.

*British bank Northern Rock faces break-up talk
4 hours ago

LONDON (AFP) Troubled British bank Northern Rock was the subject of break-up rumours on Sunday as it sought to reassure panicking customers and investors following an emergency bail-out by the Bank of England.

Northern Rock's share price slumped by almost a third on Friday on news of the emergency loan, and the lender's chief executive conceded in a newspaper interview Sunday that this made it a takeover target.

"Our share price has come off 30 percent," Adam Applegarth was quoted as saying by the weekly Sunday Telegraph. "You have got to be vulnerable if your share price has come down. It's up to the bidders to make a bid."

The paper said that one rescue plan involved carving up Northern Rock's mortgage book -- totalling 100 billion pounds (145 billion euros, 200 billion dollars) -- and distributing it amongst other lenders.

Meanwhile, the Mail on Sunday, quoting senior banking figures, said rival banking groups would wait before making a move.

The likes of Barclays, HSBC, Lloyds TSB, Royal Bank of Scotland and French bank Credit Agricole would wait "until their rival is on the point of collapse so they can pick it up for a song," the paper said.

Worried customers besieged Northern Rock branches on Friday and Saturday to withdraw their savings -- despite assurances from politicians, regulators and the bank itself that it would not fall victim to the global credit squeeze.

More of the same was widely expected when the bank's branches reopen for business on Monday.

The Sunday Times newspaper predicted Northern Rock could see 12 billion pounds -- or about half of its deposits -- walk out of the door.

"The question is why wouldn't you take your money out and put it somewhere else," the newspaper quoted one senior banker as saying.

The bank is the first major British financial institution to reveal a serious reaction to the global credit crunch sparked last month by a crisis in the US subprime, or high-risk, mortgage sector.

Commercial banks are nervous about lending to each other because of fears centered on bad investments linked to US home loans. That sentiment has led to a shortage of cash for banks like Northern Rock to lend to customers.

"In light of the continuing extreme global liquidity crisis, which is impacting markets around the world, we have had to slow down our lending activities and will continue to do so until markets normalise," Northern Rock told customers on its website.

In response to the question "Are my savings safe?", the bank said: "Yes. Our relationships with our customers are of paramount importance to us and there will be no change to your account or the service we will provide to you.

David Cameron, leader of Britain's main opposition Conservatives, accused Prime Minister Gordon Brown of failing to rein in borrowing during his decade as finance minister from 1997.

"This government has presided over a huge expansion of public and private debt without showing awareness of the risks involved," Cameron wrote in the Sunday Telegraph.

Finance minister Alistair Darling said Cameron was "jumping on a bandwagon" in an interview with Sky News, adding that the British economy would weather recent developments.

"If you look at the British economy, it is strong, it's been growing now for over ten years. We've had shocks in the past ... and we carried on growing when others faltered.

"Yes, what has happened in America will have an effect in other parts of the world but I am confident that the fundamentals of our economy are sound.

Northern Rock's share price closed down 31.46 percent at 438 pence on Friday"

The shares could end up next to worthless imo

thanks seawallwalker- reflecting on this further we may well see the sp suspended while awaiting an announcement. We shall see.