EU approves Northern Rock banking operations split

Under the terms of the deal, the good bank will take on customer deposits, top-rated mortgages and the bank's branch network.

Other banking operations will be put into the bad bank, which will be known as Northern Rock (Asset Management).

It will hold Northern Rock's toxic assets, such as its Granite mortgage securitisation vehicle and lower-performing mortgages that have been supported by government loans.

Gary Hoffman, chief executive of Northern Rock, said: "We are making good progress towards achieving the legal and capital restructure and will continue to work with the government and the FSA to achieve the necessary approvals."

Earlier this month, the lender, which is operating under government restraints following last year's bailout, announced a cut in its mortgage rates in a bid to make its products more competitive.

Updated: 29 October 2009.
Categories: banking-and-financial-services, jobs, market-and-industry-news.