110-576: Bradford & Bingley plc was a British bank with headquarters in the West Yorkshire town of Bingley . The bank was formed in December 2000 by demutualisation of the Bradford & Bingley Building Society following a vote of the building society 's members, who swapped their nominal share of the building society for at least 250 shares of the newly formed bank. In 2008, partly due to
220-412: A bank account is considered indispensable by most businesses and individuals. Non-banks that provide payment services such as remittance companies are normally not considered as an adequate substitute for a bank account. Banks issue new money when they make loans. In contemporary banking systems, regulators set a minimum level of reserve funds that banks must hold against the deposit liabilities created by
330-409: A bank varies from country to country. See the relevant country pages for more information. Under English common law , a banker is defined as a person who carries on the business of banking by conducting current accounts for their customers, paying cheques drawn on them and also collecting cheques for their customers. In most common law jurisdictions there is a Bills of Exchange Act that codifies
440-458: A building society to a bank), Northern Rock distributed shares to members with savings accounts and mortgage loans ; the flotation share price was £4.51908. It joined the stock exchange as a minor bank. In 2000, it was promoted to the FTSE 100 Index . After the 2007 crisis, it was demoted to the FTSE 250 in December of that year, before suspension upon nationalisation . On 14 September 2007
550-452: A central role over many centuries. The oldest existing retail bank is Banca Monte dei Paschi di Siena (founded in 1472), while the oldest existing merchant bank is Berenberg Bank (founded in 1590). Banking as an archaic activity (or quasi-banking ) is thought to have begun as early as the end of the 4th millennium BCE, to the 3rd millennia BCE. The present era of banking can be traced to medieval and early Renaissance Italy, to
660-447: A commercial buyer or secure the further government support needed, it was taken into public ownership in 2008, as an alternative to insolvency . By that point the government had extended liquidity support of tens of billions of pounds to Northern Rock. An inquiry concluded that the board had failed to properly protect the bank from the risks inherent in its strategy, or to restrain the executive directors where required, therefore although
770-514: A further £73 million deferred consideration was paid by Virgin. In 2014 Virgin Money repaid a further £154.5 million that it had received as part of the refinancing package. The Northern Rock Shareholder Action Group (NRSAG) has been active since the Northern Rock crisis began in 2007, seeking fair compensation for the thousands of small shareholders who owned Northern Rock shares. The group
880-508: A green support services company, Eaga (now Carillion Energy ), as it was surplus to the bank's requirements at the time. The Kielder and Prudhoe buildings of the Gosforth site were completed in the early 1990s, behind which lies the distinctive glass-fronted Alnwick building. The main Atrium reception is adjacent to this, opening out onto Baker Street , a large covered atrium that housed
990-425: A large number of small to medium-sized institutions in its banking system. As of November 2009, China's top four banks have in excess of 67,000 branches ( ICBC :18000+, BOC :12000+, CCB :13000+, ABC :24000+) with an additional 140 smaller banks with an undetermined number of branches. Japan had 129 banks and 12,000 branches. In 2004, Germany, France, and Italy each had more than 30,000 branches – more than double
1100-658: A large scale, financing the purchase of shares in the Suez canal for the British government in 1875. The word bank was taken into Middle English from Middle French banque , from Old Italian banco , meaning "table", from Old High German banc, bank "bench, counter". Benches were used as makeshift desks or exchange counters during the Renaissance by Florentine bankers, who used to make their transactions atop desks covered by green tablecloths. The definition of
1210-471: A new supermarket, but would instead demolish the building and sell the site. Demolition work was delayed by the discovery of roosting bats and asbestos, but began in January 2015. On 12 January 2017, it was confirmed that Sainsbury's had sold the site to rival supermarket company Lidl . During the nationalisation process, it was revealed that the bank had registered more than 100 separate trademarks featuring
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#17327838803921320-496: A process known as securitisation . In 2007, there was much press attention given to the growing crisis due to subprime mortgage lending, particularly in the United States. Amid the resultant unease by August 2007, global demand from investors for securitised mortgages had fallen away, and Northern Rock was unable to raise funding by selling its securitised loan books, and therefore became unable to repay short-term loans from
1430-695: A restaurant, shop and on-site branch. A number of other buildings, all named after North-Eastern castles are joined to Baker Street . A sub-division in Guernsey was established in February 1996, handling offshore savings and investment accounts. The Guernsey business was shut down on 2 September 2010. Northern Rock opened a branch in Ireland on 16 November 1999 and the first branch in Northern Ireland followed on 4 April 2007. The first branch of
1540-430: A single holding company, UK Asset Resolution , on 1 October 2010. Under UKAR's ownnership, a number of asset sales were undertaken, with the proceeds use to repay the government loan. On 29 October 2021, ownership of Bradford and Bingley was transferred from UK Asset Resolution to Davidson Kempner Capital Management , returning the company to private ownership. The government loan was repaid at this point, which ended
1650-566: A sizable surplus in the years after nationalisation, even though any and all Government assistance was completely reimbursed in those years, including interest paid at penal rates at no expense to the UK public. The NRSAG asked the Government to review their original compensation decision, given that the updated and widely confirmed numbers prove a huge surplus. To request an appeal, the NRSAG wrote to
1760-443: A suitable buyer could not be found. With the structure already in place form the legislation involved in the nationalisation of the Northern Rock bank in February 2008 (see Banking (Special Provisions) Act 2008 and Nationalisation of Northern Rock, Bradford & Bingley was nationalised on 29 September 2008. European regulators approved the government's rescue plan for Bradford & Bingley after just 24 hours. On 29 September 2008 it
1870-469: A system known as fractional-reserve banking , under which banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure liquidity , banks are generally subject to minimum capital requirements based on an international set of capital standards, the Basel Accords . Banking in its modern sense evolved in the fourteenth century in
1980-399: A variety of different ways including interest, transaction fees and financial advice. Traditionally, the most significant method is via charging interest on the capital it lends out to customers. The bank profits from the difference between the level of interest it pays for deposits and other sources of funds, and the level of interest it charges in its lending activities. This difference
2090-446: Is a bank regulation , which sets a framework within which a bank or depository institution must manage its balance sheet . The categorisation of assets and capital is highly standardised so that it can be risk weighted . After the financial crisis of 2007–2008 , regulators force banks to issue Contingent convertible bonds (CoCos). These are hybrid capital securities that absorb losses in accordance with their contractual terms when
2200-436: Is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans . Lending activities can be directly performed by the bank or indirectly through capital markets . Whereas banks play an important role in financial stability and the economy of a country, most jurisdictions exercise a high degree of regulation over banks. Most countries have institutionalized
2310-403: Is a list of the largest deals in history in terms of value with participation from at least one bank: Currently, commercial banks are regulated in most jurisdictions by government entities and require a special bank license to operate. Usually, the definition of the business of banking for the purposes of regulation is extended to include acceptance of deposits, even if they are not repayable to
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#17327838803922420-628: Is also closed to new business, following Bradford & Bingley's nationalisation. Bradford & Bingley's former headquarters were on Main Street in Bingley. A new office in Crossflatts in Bingley was built in 2004, which became the new company headquarters. Following Santander's purchase of the savings business, it was confirmed in May 2009 that remaining Bradford & Bingley staff would transfer to
2530-431: Is referred to as the spread between the cost of funds and the loan interest rate. Historically, profitability from lending activities has been cyclical and dependent on the needs and strengths of loan customers and the stage of the economic cycle . Fees and financial advice constitute a more stable revenue stream and banks have therefore placed more emphasis on these revenue lines to smooth their financial performance. In
2640-429: Is run by a committee of volunteers. The UK Shareholders Association provide administrative and advisory oversight to the group. The Committee reached the conclusion that HM Treasury has made a substantial amount of money from running down the loan book of the bank. The NRSAG committee made several failed appeals to the Government previously, but the facts were not fully known then, but it is evident now that all loans to
2750-742: The Federal Deposit Insurance Corporation (FDIC) as a regulator. However, for soundness examinations (i.e., whether a bank is operating in a sound manner), the Federal Reserve is the primary federal regulator for Fed-member state banks; the Office of the Comptroller of the Currency (OCC) is the primary federal regulator for national banks. State non-member banks are examined by the state agencies as well as
2860-588: The Great Depression , the U.S. Savings and Loan crisis in the 1980s and early 1990s, the Japanese banking crisis during the 1990s, and the sub-prime mortgage crisis in the 2000s. The 2023 global banking crisis is the latest of these crises: In March 2023, liquidity shortages and bank insolvencies led to three bank failures in the United States , and within two weeks, several of the world's largest banks failed or were shut down by regulators Assets of
2970-476: The London Stock Exchange with the ticker symbol NRK. During the early 2000s the company borrowed substantially to fund mortgages, with the aim of ambitious growth, and also donated large amounts to charitable purposes and communities directly and through sponsorships. The global banking crisis beginning around 2007–08 meant that it was unable to produce income as expected from its loans, and
3080-704: The bowler hat , its long-running logo . The bank had also purchased a bowler hat in 1995 which had formerly belonged to Stan Laurel , for £2,000. Ownership of the trademarks transferred to Santander with the licence to use the Bradford & Bingley name as part of the sale. Bradford & Bingley were previously sponsors of Yorkshire County Cricket Club , Bradford & Bingley RFC (formerly Bingley Bees), and team sponsor of Bradford City A.F.C. Valley Parade stadium had previously been known as Bradford & Bingley Stadium through sponsorship rights. 53°50′49″N 1°50′17″W / 53.847°N 1.838°W / 53.847; -1.838 Bank A bank
3190-560: The credit crunch , the bank was nationalised and in effect split into two parts; the mortgage book and investment portfolios remained with the now publicly owned Bradford & Bingley plc, and the deposits and branch network (and a licence to use the B&;B name for those aspects) was sold to Abbey National , itself owned by the Spanish Santander Group . The branch network was rebranded Santander on 11 January 2010 and
3300-481: The 15,000 branches in the United Kingdom. Between 1985 and 2018 banks engaged in around 28,798 mergers or acquisitions, either as the acquirer or the target company. The overall known value of these deals cumulates to around 5,169 bil. USD. In terms of value, there have been two major waves (1999 and 2007) which both peaked at around 460 bil. USD followed by a steep decline (−82% from 2007 until 2018). Here
3410-479: The 1990s. Notably, Dave Jones, the Group Finance Director through the crisis, had only been in his role since the retirement of Bob Bennett in January 2007. Alongside Applegarth, Bennett had been one of the architects of the bank's flotation in 1997 and its subsequent substantial growth. He had been wary of its continued aggressive growth strategy, which would continue up until summer 2007, despite
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3520-502: The 2000s, which saw the development some new buildings as well as the demolition of their original 1960s tower block during Spring 2006. A new tower block, simply known as The Tower , was completed in November 2008, originally intended to create 1500 jobs, and act as the main entrance and focal point of the company headquarters. The local council, Newcastle City Council , purchased the building for £22 million, and leased it to
3630-515: The Bank of England, to replace funds it was unable to raise from the money market. Reporting of this complex scenario led to panic among individual depositors, who feared that their savings might not be available should Northern Rock go into receivership. The result was a bank run – the UK's first in 150 years – where depositors lined up outside the bank to withdraw all of their savings as quickly as possible, particularly since many other people were doing
3740-585: The Bradford & Bingley name mainly relates to the nationalised section of the bank. From 2010, the brand has been used under licence for insurance products by BGL Group . The Bradford & Bingley Building Society was the product of a merger between the Bradford Equitable Building Society (Bradford EBS) and the Bingley Building Society (Bingley BS) in 1964. There had been a move towards consolidation in
3850-480: The British courts, but hoped to take the case to the European courts. However, on 8 December 2009, it was announced that the valuer Andrew Caldwell had decided that the Northern Rock shareholders should get no compensation. On 23 February 2009, Northern Rock announced that they would be offering £14 billion worth of new mortgages, over the next two years, as a part of their new business plan. This new lending
3960-529: The FDIC. National banks have one primary regulator – the OCC. Each regulatory agency has its own set of rules and regulations to which banks and thrifts must adhere. The Federal Financial Institutions Examination Council (FFIEC) was established in 1979 as a formal inter-agency body empowered to prescribe uniform principles, standards, and report forms for the federal examination of financial institutions. Although
4070-638: The FFIEC has resulted in a greater degree of regulatory consistency between the agencies, the rules and regulations are constantly changing. Northern Rock Northern Rock , formerly the Northern Rock Building Society , was a British bank . Based at Regent Centre in Newcastle upon Tyne , United Kingdom, Northern Rock was originally a building society . It demutualised and became Northern Rock bank in 1997, when it floated on
4180-509: The Government effectively took ownership of the insolvent institution away from its shareholders, without reimbursement. The media reported cases where some shareholders had their life savings in the shares, which were taken from them. The shares had already lost over 90% of their value prior to nationalisation, and were valued at nil in an independent valuation process, as the government had not guaranteed aid. This would later form part of shareholder's action to seek compensation as, at that point,
4290-508: The Loan for those who did not have a Bradford & Bingley branch locally. Since the takeover by HM Treasury of the lending operations, Bradford & Bingley no longer offered new mortgages or other lending products. Bradford & Bingley had developed Mortgage Express into a 'niche' lending brand dealing with specialist lending with more complicated underwriting requirements such as buy-to-let and self-certification mortgages. Mortgage Express
4400-596: The NR 'blocks' inline with the main company, using the same new typeface. The Red Box Design Group designed all the currently standing buildings at the company's headquarters in Gosforth and have contributed to many of the other design aspects of the company, such as the in-branch styling. From 1 October 1997 until the government nationalisation, the bank used the symbol NRK on the London Stock Exchange. One of Northern Rock's final advertising campaigns before
4510-659: The Northern Counties Permanent Building Society (established in 1850) and the Rock Building Society (established in 1865). During the following 30 years, Northern Rock expanded through the acquisition of 53 smaller building societies, most notably the North of England Building Society in 1994. Along with many other UK building societies in the 1990s, Northern Rock chose to demutualise as a building society and float on
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4620-659: The Treasury Select Committee. Also, the group wrote to each MP to back their campaign for fairness and justice. Northern Rock has been one of the top five mortgage lenders in the United Kingdom in terms of gross lending according to Council of Mortgage Lenders statistics. As well as mortgages, the bank also deals with savings accounts and insurance. Home and contents insurance was dealt with by AXA whilst Legal & General , whose mortgage book Northern Rock acquired, arranged life insurance investments. The bank offered credit cards until 2003, when it sold
4730-538: The UK, for example, the Financial Services Authority licenses banks, and some commercial banks (such as the Bank of Scotland ) issue their own banknotes in addition to those issued by the Bank of England , the UK government's central bank. Banking law is based on a contractual analysis of the relationship between the bank (defined above) and the customer – defined as any entity for which
4840-529: The Vice President; and there were Joint Managing Directors. The new Society ranked number eight in the industry. The period between the formation of the Bradford & Bingley Building Society and the conversion to a public company in 2000 saw sustained and substantial growth. Financial growth was aided by inflation, particularly in house prices, but the increase in members was from 164,000 in 1964 to 1.85m in 1988. As well as organic development through
4950-456: The aid was certain and the company had never stopped operating as a going concern. A substantial reduction in the staff was announced in 2008, with 800 people made compulsorily redundant in July of that year, and another 500 taking voluntary redundancy. The bank planned to make another 700 redundant by 2011. On 1 January 2010 the bank was split into two parts, assets and banking. In June 2011
5060-639: The bank agrees to conduct an account. The law implies rights and obligations into this relationship as follows: These implied contractual terms may be modified by express agreement between the customer and the bank. The statutes and regulations in force within a particular jurisdiction may also modify the above terms or create new rights, obligations, or limitations relevant to the bank-customer relationship. Some types of financial institutions, such as building societies and credit unions , may be partly or wholly exempt from bank license requirements, and therefore regulated under separate rules. The requirements for
5170-469: The bank had sufficient assets, it had become vulnerable. The branch operations were eventually returned to private ownership when the branches and other retail operations were acquired by Virgin Group in 2012, being rebranded as Virgin Money the same year. The mortgage book of higher risk assets was renamed Northern Rock (Asset Management) and later " NRAM plc ", and remained in public ownership until it
5280-495: The bank included Virgin Money , National Australia Bank , NBNK , Santander , Blackstone , Tesco , TowerBrook , Yorkshire Building Society and Coventry Building Society . Former Chancellor of the Exchequer Alistair Darling had stated that he was in no "hurry" to return the bank to the private sector. The bank was split into two parts, assets and banking on 1 January 2010. On 15 June 2011, it
5390-401: The bank is structured or regulated. The business of banking is in many common law countries not defined by statute but by common law, the definition above. In other English common law jurisdictions there are statutory definitions of the business of banking or banking business . When looking at these definitions it is important to keep in mind that they are defining the business of banking for
5500-416: The bank is to restore, not the same money, but an equivalent sum, whenever it is demanded and money, when paid into a bank, ceases altogether to be the money of the principal (see Parker v. Marchant, 1 Phillips 360); it is then the money of the banker, who is bound to return an equivalent, by paying a similar sum to that deposited with him, when he is asked for it. The goldsmith paid interest on deposits. Since
5610-550: The bank opened in Denmark on 7 February 2007; however as part of the Government restructuring, the Danish operations ceased on 18 June 2008. The €650 million worth of Irish deposits were sold to Permanent TSB in 2011. In 2000 Northern Rock introduced a new corporate identity consisting of a magenta square containing the company name. This replaced the NR 'blocks' logo. The Northern Rock Foundation also changed its logo in 2003 from
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#17327838803925720-408: The bank sought and received a liquidity support facility from the Bank of England , following problems in the credit markets caused by the 2007–2008 financial crisis . The bank was more exposed than others to restrictions in the supply of credit because of the way it had funded its expansion. It had borrowed short term on the wholesale money markets and lent long term for mortgages on property. This
5830-492: The bank was officially put up for sale back to the private sector, and on 17 November 2011 it was announced that Virgin Money was going to buy Northern Rock plc for £747 million up front and other potential payments of up to £280 million over the next few years. The sale went through on 1 January 2012. The government said it had no plans to sell Northern Rock (Asset Management) and there would be no further job losses, except for those already announced. Virgin also pledged to keep
5940-417: The bank was repaying the loan well ahead of target, owing a net balance of only £8.9 billion of the loan which stood at £26.9 billion at the end of 2007. By October, customers appeared to be regaining confidence in the bank, when it emerged that there had been a surge in the number of new accounts which had been opened. People perceived Northern Rock as a safe place to put their money, given that it
6050-521: The bank was taken into state ownership as a result of two unsuccessful bids to take over the bank, neither being able to fully commit to repayment of taxpayers' money within three years. The bank was managed at " arm's length " by the government through UK Financial Investments . The bank planned to repay the government debt within three to four years, primarily by encouraging mortgage customers to take their mortgage to another lender. Costs were also reduced by reducing numbers of staff. As of 3 March 2009,
6160-411: The bank will not repay it), and interest rate risk (the possibility that the bank will become unprofitable, if rising interest rates force it to pay relatively more on its deposits than it receives on its loans). Banking crises have developed many times throughout history when one or more risks have emerged for the banking sector as a whole. Prominent examples include the bank run that occurred during
6270-667: The bank, and collecting cheques deposited to customers' current accounts. Banks also enable customer payments via other payment methods such as Automated Clearing House (ACH), Wire transfers or telegraphic transfer , EFTPOS , and automated teller machines (ATMs). Banks borrow money by accepting funds deposited on current accounts, by accepting term deposits , and by issuing debt securities such as banknotes and bonds . Banks lend money by making advances to customers on current accounts, by making installment loans , and by investing in marketable debt securities and other forms of money lending. Banks provide different payment services, and
6380-407: The bonuses would enable them to retain critical staff members at risk of being poached by other companies. It had previously been criticised in 1998 when the pay of the executive team that led the flotation was 40% higher in the year following. In late 2007, Virgin Money was named as the preferred bidder for the group, with Olivant Group later beginning talks around takeover. On 22 February 2008,
6490-419: The business to The Co-operative Bank in order to free capital for its rapid growth in mortgage lending, making a profit of more than £7 million. Northern Rock continued to sell credit cards under its own brand through The Co-operative Bank until November 2007; the decision to stop was made before the 2007 crisis. In 2006 the bank had moved into sub-prime lending via a deal with Lehman Brothers . Although
6600-414: The business to Nationwide in 4 years. After 27 years the business is once again a mutual. Under non-executive chairman Matt Ridley and Chief Executive Adam Applegarth , Northern Rock had a business plan which involved borrowing heavily in the UK and international money markets, extending mortgages to customers based on this funding, and then re-selling these mortgages on international capital markets, in
6710-533: The capital of the issuing bank falls below a certain level. Then debt is reduced and bank capitalisation gets a boost. Owing to their capacity to absorb losses, CoCos have the potential to satisfy regulatory capital requirement. The economic functions of banks include: Banks are susceptible to many forms of risk which have triggered occasional systemic crises. These include liquidity risk (where many depositors may request withdrawals in excess of available funds), credit risk (the chance that those who owe money to
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#17327838803926820-483: The cheque has lost its primacy in most banking systems as a payment instrument. This has led legal theorists to suggest that the cheque based definition should be broadened to include financial institutions that conduct current accounts for customers and enable customers to pay and be paid by third parties, even if they do not pay and collect cheques . Banks act as payment agents by conducting checking or current accounts for customers, paying cheques drawn by customers in
6930-486: The chief executive, were made internally. At the time of the 2007 financial crisis Matt Ridley was the chairman and Adam Applegarth was the chief executive. Ridley resigned in October 2007 and Applegarth resigned in November 2007, although the latter stayed on in a caretaker role until December 2007. The chief financial officer was Andy Kuipers, who joined the company in 1987. After Applegarth's departure, Kuipers became
7040-599: The company's head office in Crossflatts, and that the Bingley building would be sold or sub-let. Sainsbury's bought the building in 2010 and unveiled plans to redevelop it as a supermarket. Planning permission for a new supermarket was granted in September 2011, but in April 2012, Sainsbury's admitted that building work would not begin for another 12 months. In November 2013 the company revealed it would not go ahead with
7150-409: The company's share price dropped to a record low. On 25 September 2008 they announced that 370 jobs were to go. The bank had also been seeking options from the Financial Services Authority (FSA) and the government to secure the future of the company, including selling the company to another bank or nationalisation . With Bradford & Bingley being nationalised, the structure was already in place from
7260-423: The cross-selling of complementary products. Banks face a number of risks in order to conduct their business, and how well these risks are managed and understood is a key driver behind profitability, and how much capital a bank is required to hold. Bank capital consists principally of equity , retained earnings and subordinated debt . Some of the main risks faced by banks include: The capital requirement
7370-408: The customer's order – although money lending, by itself, is generally not included in the definition. Unlike most other regulated industries, the regulator is typically also a participant in the market, being either publicly or privately governed central bank . Central banks also typically have a monopoly on the business of issuing banknotes . However, in some countries, this is not the case. In
7480-589: The funding of these loans, in order to ensure that the banks can meet demands for payment of such deposits. These reserves can be acquired through the acceptance of new deposits, sale of other assets, or borrowing from other banks including the central bank. Activities undertaken by banks include personal banking , corporate banking , investment banking , private banking , transaction banking , insurance , consumer finance , trade finance and other related. Banks offer many different channels to access their banking and other services: A bank can generate revenue in
7590-520: The goldsmiths of London became the forerunners of banking by creating new money based on credit. The Bank of England originated the permanent issue of banknotes in 1695. The Royal Bank of Scotland established the first overdraft facility in 1728. By the beginning of the 19th century Lubbock's Bank had established a bankers' clearing house in London to allow multiple banks to clear transactions. The Rothschilds pioneered international finance on
7700-574: The government had taken over. Over 300 shareholders complained to the UK Shareholders Association that they had not received information relating to the fate of their holdings. Peter Clokey of PricewaterhouseCoopers was appointed by the government in June 2009 to act as independent valuer of the business, and it was reported that shareholders would be told how much compensation they were entitled to by June 2010. Clokey's assessment
7810-447: The government set up a new company, UK Financial Investments (UKFI), to manage the shareholdings in Northern Rock and Bradford & Bingley. When the shares closed on 26 September they were worth 20 pence each, valuing the bank at £256 million, substantially less than Santander paid for it. In March 2006 the bank had been valued at £3.2 billion. Bradford & Bingley's shareholders were not reimbursed for their shares which
7920-634: The government's financial interest in Bradford & Bingley. On 23 October 2023, Bradford and Bingley, and Mortgage Express ceased to operate with all remaining accounts transferred to Hyalite Mortgages, a division of Topaz Finance Limited. The group ran two distinct businesses: retail and lending . Bradford & Bingley distributed brand-name and third party financial products. As at 31 December 2007 they had 197 branches and 140 third party agent locations offering retail products and face to face advice in addition to online and intermediary distribution. Bradford & Bingley's approach to mortgage advising
8030-618: The headquarters of the bank in Newcastle upon Tyne. The combined business now operates under the Virgin Money brand. On 12 October 2012 Northern Rock plc was renamed Virgin Money plc, and Virgin Money Limited was renamed Northern Rock Limited. By this time the Northern Rock website had effectively become a ' soft redirect ' to Virgin Money's website. In 2024, Nationwide Building Society bought Virgin Money, and aims to rebrand
8140-614: The increasing volatility in the markets on which Northern Rock relied. Commentators later suggested that with Bennett's retirement, the executive board was dominated by Applegarth. A report by the Financial Services Authority conceded in February 2008 that it had been wrong to consider Northern Rock low risk, and as a result had given the company too little scrutiny. The group was criticised when it emerged that they had begun to pay in excess of 150 senior staff members substantial retention bonuses. Northern Rock hoped
8250-517: The industry which had as many as 681 societies. In 1963 Bingley made the approach and the merger was effected with the understanding that there would be complete parity of control. Although Bingley BS had the larger number of branches (29 v 23) it was smaller by assets compared to the Bradford EBS (£43m v £56m). The Head Office was to be at Bingley; Bradford EBS had the President and Bingley BS
8360-406: The issue of banknotes emerged in the 17th and 18th centuries. Merchants started to store their gold with the goldsmiths of London , who possessed private vaults , and who charged a fee for that service. In exchange for each deposit of precious metal, the goldsmiths issued receipts certifying the quantity and purity of the metal they held as a bailee ; these receipts could not be assigned, only
8470-442: The issue of a bank license vary between jurisdictions but typically include: Banks' activities can be divided into: Most banks are profit-making, private enterprises. However, some are owned by the government, or are non-profit organisations . The United States banking industry is one of the most heavily regulated and guarded in the world, with multiple specialised and focused regulators. All banks with FDIC-insured deposits have
8580-409: The largest 1,000 banks in the world grew by 6.8% in the 2008–2009 financial year to a record US$ 96.4 trillion while profits declined by 85% to US$ 115 billion. Growth in assets in adverse market conditions was largely a result of recapitalisation. EU banks held the largest share of the total, 56% in 2008–2009, down from 61% in the previous year. Asian banks' share increased from 12% to 14% during
8690-436: The law in relation to negotiable instruments , including cheques, and this Act contains a statutory definition of the term banker : banker includes a body of persons, whether incorporated or not, who carry on the business of banking' (Section 2, Interpretation). Although this definition seems circular, it is actually functional, because it ensures that the legal basis for bank transactions such as cheques does not depend on how
8800-463: The legislation involved in the nationalisation of the Northern Rock bank in February (see Banking (Special Provisions) Act 2008 and Nationalisation of Northern Rock ). The European regulators approved the government's rescue plan for Bradford & Bingley after just 24 hours. There were reports from various sources that Bradford & Bingley was to be nationalised in its entirety, because
8910-458: The money market. This problem had been anticipated by the financial markets, which drew greater attention to it. The major UK banks also faced the same problems raising funding, but as less of their business model was reliant upon securitisation, the effective freezing of the market in August 2007 was less critical. On 14 September 2007, the bank sought and received a liquidity support facility from
9020-411: The mortgages were sold under Northern Rock's brand through intermediaries, the risk was being underwritten by Lehman Brothers. Mortgages with LTV ("Loan to Value") ratios of up to 130% were made. At the time of being bought by Virgin the bank had 75 branches that have since been re-branded under the Virgin Money name. In 2012 Northern Rock began to provide Virgin-branded savings accounts. The bank
9130-519: The opening of new branches there were 24 acquisitions of other building societies between 1967 and 1987. The Hearts of Oak Society in 1982 was of particular benefit as it brought in 28 branches, mainly in the south-east. By 1988 the number of branches had increased from the 52 post-merger to around 250. Despite all this, the Society was still only number eight in the industry – a reflection of the amalgamations that were taking place elsewhere. In May 1997
9240-420: The original depositor could collect the stored goods. Gradually the goldsmiths began to lend money out on behalf of the depositor , and promissory notes , which evolved into banknotes, were issued for money deposited as a loan to the goldsmith. Thus, by the 19th century, we find in ordinary cases of deposits, of money with banking corporations, or bankers, the transaction amounts to a mere loan, or mutuum , and
9350-455: The past 20 years, American banks have taken many measures to ensure that they remain profitable while responding to increasingly changing market conditions. This helps in making a profit and facilitates economic development as a whole. Recently, as banks have been faced with pressure from fintechs, new and additional business models have been suggested such as freemium, monetisation of data, white-labeling of banking and payment applications, or
9460-438: The promissory notes were payable on demand, and the advances (loans) to the goldsmith's customers were repayable over a longer time-period, this was an early form of fractional reserve banking . The promissory notes developed into an assignable instrument which could circulate as a safe and convenient form of money backed by the goldsmith's promise to pay, allowing goldsmiths to advance loans with little risk of default . Thus
9570-731: The prosperous cities of Renaissance Italy but, in many ways, functioned as a continuation of ideas and concepts of credit and lending that had their roots in the ancient world . In the history of banking , a number of banking dynasties – notably, the Medicis , the Pazzi , the Fuggers , the Welsers , the Berenbergs , and the Rothschilds – have played
9680-410: The purchase by Virgin was titled 'Works for Me' and featured local customers. Following the purchase by Virgin, the Northern Rock brand was gradually phased out during 2012. Upon buying Northern Rock, Virgin Money changed their logo to use both Virgin's red and Northern Rock's magenta colours. Prior to the credit crisis the company had focused on developing its own staff, and most appointments, including
9790-487: The purposes of the legislation, and not necessarily in general. In particular, most of the definitions are from legislation that has the purpose of regulating and supervising banks rather than regulating the actual business of banking. However, in many cases, the statutory definition closely mirrors the common law one. Examples of statutory definitions: Since the advent of EFTPOS (Electronic Funds Transfer at Point Of Sale), direct credit, direct debit and internet banking ,
9900-576: The rich cities in the centre and north like Florence , Lucca , Siena , Venice and Genoa . The Bardi and Peruzzi families dominated banking in 14th-century Florence, establishing branches in many other parts of Europe. Giovanni di Bicci de' Medici set up one of the most famous Italian banks, the Medici Bank , in 1397. The Republic of Genoa founded the earliest-known state deposit bank, and Banco di San Giorgio (Bank of St. George), in 1407 at Genoa , Italy. Fractional reserve banking and
10010-468: The running down its £42.2 billion loan book over the next ten years. In October, the Telegraph reported that the mortgage part of Bradford and Bingley would be mirroring the decision by Northern Rock to split their assets into good and bad assets, to attempt to pay off its £18.4 billion loan early. On 11 January 2010, the combined business of Abbey and the Bradford & Bingley branch network
10120-416: The same. As the UK government provided the liquidity support facility, they also exerted pressure on the bank to create a longer-term recovery plan. Over the next few months, there were numerous changes to the board of directors and executive team. On 19 October, chairman Matt Ridley resigned and was replaced by Bryan Sanderson, a former Managing Director of BP. Chief Executive Adam Applegarth's resignation
10230-705: The savings business and branch network was transferred to Abbey National, part of the Santander Group, where it was subsequently rebranded under the Santander name. Bradford & Bingley International was an offshore subsidiary of Bradford & Bingley based on the Isle of Man , and this was also transferred to Santander through Abbey National. Bradford & Bingley had its own lending products including mortgage and commercial real estate products. Bradford & Bingley also provided loan quotes through Compare
10340-510: The society bought Mortgage Express from Lloyds TSB for £64 million. In December 2000, following a vote by members, the society demutualised and floated on the London Stock Exchange (using the symbol BB). Former members of the society each received a minimum of 250 shares worth £567.50 at the time, and savers with more savings receiving more shares worth up to £5,000 each. B&B had chosen to specialise in buy-to-let and self-certification mortgages – its strategy left it exposed to
10450-595: The stock exchange as a bank. Throughout this period an argument against demutualisation was that the assets of a mutual society were built up by its members throughout its history, not just by current members, and that demutualisation was a betrayal of the community that the societies were created to serve. Northern Rock chose to address these concerns by establishing the Northern Rock Foundation, which funded community-based projects. At its Stock Exchange flotation on 1 October 1997 (when it converted from
10560-427: The sub-prime crisis. In response to the 2007–2008 financial crisis in June 2008 the company launched a £400 million rights issue . This was not well subscribed by shareholders, leaving much of issue with underwriters . The issue had not been helped when TPG Capital , who had previously agreed to take a 23% stake in the company, withdrew their support. Due to the effects of the credit crunch, in September 2008
10670-549: The taxpayer have been paid in full at penal rates of interest. That means compensation to shareholders will not be a charge on taxpayers or upon the general public because it is payable out of the surplus funds, built since nationalisation in 2008, as a result of asset disposals. The NRSAG claim that despite comparable conditions, no other failed bank was handled in this manner during the global financial crisis. Instead, other banks received full Government backing, bailouts and shareholders retained their shares. The Government has earned
10780-462: The year, while the share of US banks increased from 11% to 13%. Fee revenue generated by global investment in banking totalled US$ 66.3 billion in 2009, up 12% on the previous year. The United States has the most banks in the world in terms of institutions (5,330 as of 2015) and possibly branches (81,607 as of 2015). This is an indicator of the geography and regulatory structure of the US, resulting in
10890-401: Was a policy well known to cause failures (see Banking School Theory of Crises under Financial Crises ) when short-term interest rates rose above long-term rates and insufficient hedging was in place. The bank was nationalised at 00:01 on 22 February 2008 following two unsuccessful bids to take over the bank, neither being able to fully commit to repayment of taxpayers' money. In doing so,
11000-644: Was also announced that the Spanish Santander Group under its Abbey National brand would acquire all of Bradford & Bingley's £20 billion (2.7 million customers) savings business and branch network. Santander paid £612 million, including the transfer of £208 million of capital relating to offshore companies. Bradford & Bingley's 197 retail branches, 141 agencies and related employees were transferred to Santander's subsidiary Abbey . The mortgage book, personal loan book, headquarters, treasury assets and its wholesale liabilities were taken into public ownership and closed to new business.In November 2008,
11110-416: Was announced that the bank was to be sold to a single buyer in the private sector by the end of the year. On 22 March 2011, the bank issued its first mortgage securitisation since the 2007 recession which nearly brought the bank down. On 17 November 2011, it was announced that Virgin Money was going to buy Northern Rock plc for £747 million. The sale was completed on 1 January 2012, and by July of that year
11220-418: Was at risk of being unable to repay the amounts it had borrowed. The news that the bank had approached the government for support with its liquidity led within 24 hours to a public lack of confidence and concerns that savings were at risk, and the bank failed following a bank run as people rushed to withdraw their savings. It was the first British bank in 150 years to fail due to a bank run. Unable to find
11330-704: Was based on a large site at the Regent Centre in Gosforth , Newcastle upon Tyne called Northern Rock House . It had customer contact centre operations at both North of England House in Doxford International Business Park in Sunderland and at its head office. The bank developed a site at Rainton Bridge, which it sold to Npower . Northern Rock completed the redevelopment of the Gosforth site, Northern Rock House , in
11440-517: Was currently government owned. However, there was no guarantee that if Northern Rock was to fail that the government would top-up any compensation over and above the standard £85,000 offered by the Financial Services Compensation Scheme . Former shareholders and hedge funds also took legal action in January 2009 to get compensation for their shares; the shareholders lost the case. They also lost their appeals in
11550-514: Was innovative as they advised on and sold other providers mortgages as well as their own from 2000 to 2006. In late 2006, as part of their aim to become the UK's leading specialist lender, Bradford & Bingley reverted to selling only their own mortgages under the Bradford & Bingley and Mortgage Express brands. In addition, Bradford & Bingley acquired mortgages from GMAC-RFC and Kensington Mortgage Group Ltd; this accounted for 44% of gross residential advances during 2007. As mentioned above,
11660-430: Was partly funded by an increase in the government loan and a reversal of previous strategy to pay the loan off as quickly as possible by actively encouraging mortgage customers to leave when their mortgage deal matured. The reason for this change was government policy to increase the availability of credit. This £14 billion was to be split into £5 billion in 2009 and £9 billion in 2010. Potential buyers for
11770-618: Was published on 5 July 2010, finding that shareholders were not entitled to any compensation. The decision was appealed to the Upper Tribunal 's Tax and Chancery Chamber where on 19 July 2012, Judge Sir Stephen Oliver recorded that the court was satisfied that the valuer had carried out his duties wholly in accordance with the compensation scheme. In April 2009, the Financial Times reported that Bradford & Bingley may sell assets such as its commercial loan book, to assist in
11880-501: Was renamed Santander UK , and all branches were rebranded at a cost of £12 million. Alliance & Leicester was rebranded at the end of November 2010. On 25 January 2010, the European Commission approved the state aid given to the bank. On 24 March 2010 UKFI announced the merger of the mortgage business with the bad bank of Northern Rock, Northern Rock (Asset Management) plc. The two businesses were merged under
11990-624: Was sold to Cerberus Capital Management in 2016. As of May 2024 the Northern Rock Shareholder Action Group are continuing their campaign to obtain compensation for the shares that were taken over by the Government when the bank was nationalised during the 2007–2008 financial crisis. Northern Rock Building Society was formed in 1965 by the merger of two North East of England building societies, both of which were based in Newcastle-upon-Tyne:
12100-407: Was then announced in mid-November, with the caveat that he would remain with the group until it established independent funding or was purchased. Four non-executive directors, Sir Derek Wanless, Nichola Pease, Adam Fenwick and Rosemary Radcliffe also resigned. A month later, Applegarth left and former Marketing Director, Andy Kuipers, was appointed Chief Executive. Kuipers had been with the bank since
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