The decision to put Northern Rock plc into temporary public ownership will result in the ownership of the bank transferring from a wide spread of individual shareholders to the UK Government with ownership specifically vested in HM Treasury. The change in the ultimate ownership of Northern Rock plc will not result in any changes to the way in which the Guernsey Financial Services Commission regulates Northern Rock (Guernsey) Limited ("NRG") as a licensed entity. The Commission will be asked to approve a change of controller for NRG as a wholly-owned subsidiary of Northern Rock plc. The Chancellor has confirmed that on completion of the change of ownership process, Northern Rock plc will be managed on an arms' length basis as a commercial entity with autonomy for the decisions it takes, and that the Government is in the course of introducing a Bill to Parliament to bring the bank into public ownership.
Northern Rock plc will be managed by a newly appointed senior executive team headed by Ron Sandler CBE, former Chief Operating Officer of NatWest Group and Chief Executive of Lloyd's of London. The newly appointed executive team will work with existing Northern Rock plc management to conduct a strategic review of all parts of the Northern Rock group in order to assess the best way to take the group forward whilst in temporary public ownership. It is not possible at this stage to give any indication of the timescale for the review or the likely impact of any changes which may be made to the business of the group, but the Commission will continue to monitor developments closely.
HM Treasury has confirmed that the Northern Rock group remains open for "business as usual" with all offices, branches and call centres operating as normal. HM Treasury has also confirmed that depositors' money remains absolutely safe and secure under the change of ownership and the Government's guarantee arrangements will continue to remain in place. As the Commission has commented previously in its press release of 18 September 2007, these arrangements include NRG's wholesale deposit with Northern Rock plc.
The message for depositors of NRG is also one of business as usual with the situation, other than the ownership of NRG's parent, remaining unchanged.