Quote:A third of the £747m cash price that Sir Richard Branson’s Virgin Money is paying to buy Northern Rock will be funded from the state-owned bank’s current capital base, the Financial Times has discovered ...
Quote:A third of the £747m cash price that Sir Richard Branson’s Virgin Money is paying to buy Northern Rock will be funded from the state-owned bank’s current capital base, the Financial Times has discovered ...
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Post subject: Re: Virgin Money acquires Northern Rock
Posted: Sat Nov 19, 2011 8:03 pm
Matt01
International Chairman
Joined: Feb 12 2002 Posts: 11032 Location: Birthplace of Rugby League
People are saying banks are in a terrible position and the government did a wonderful deal to get £700+ million, so why are the bonuses for bankers this year over £4 billion then?
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Post subject: Re: Virgin Money acquires Northern Rock
Posted: Sat Nov 19, 2011 8:13 pm
McLaren_Field
International Chairman
Joined: Feb 26 2002 Posts: 32466 Location: Leeds
Let me get this straight, this is like buying a house with an acre of land attached, but before the contracts even signed you tell the seller that you can only afford to pay for the house and land if you sell the land first and use that money to pay the seller ?
There is something brilliantly corrupt about the whole thing that makes you think of a serpent swallowing its own tail.
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Post subject: Re: Virgin Money acquires Northern Rock
Posted: Sat Nov 19, 2011 8:16 pm
Big Graeme
In The Arms of 13 Angels
Joined: Mar 08 2002 Posts: 26578 Location: On the set of NEDS...
McLaren_Field wrote:Let me get this straight, this is like buying a house with an acre of land attached, but before the contracts even signed you tell the seller that you can only afford to pay for the house and land if you sell the land first and use that money to pay the seller ?
There is something brilliantly corrupt about the whole thing that makes you think of a serpent swallowing its own tail.
Even Dick Turpin had the decency to wear a mask...
Post subject: Re: Virgin Money acquires Northern Rock
Posted: Sat Nov 19, 2011 8:34 pm
tb
In The Arms of 13 Angels
Joined: Mar 05 2002 Posts: 48326 Location: Londinium
McLaren_Field wrote:Let me get this straight, this is like buying a house with an acre of land attached, but before the contracts even signed you tell the seller that you can only afford to pay for the house and land if you sell the land first and use that money to pay the seller ?
There is something brilliantly corrupt about the whole thing that makes you think of a serpent swallowing its own tail.
A nearer analogy is that we sold a house – which happened to have a safe in it, containing money – and the buyer is paying us (in part admittedly) with the money in the safe (the money that was ours, until we sold the house)
Post subject: Re: Virgin Money acquires Northern Rock
Posted: Sat Nov 19, 2011 8:56 pm
McLaren_Field
International Chairman
Joined: Feb 26 2002 Posts: 32466 Location: Leeds
...or,
You buy something and pay 100% of the price by using 33% of the asset to pay for itself, leaving you with only 66%, and then you think you've got a bargain ?
Not only that but the seller thinks they got a bargain too because until they sold it to you they owned 200% of it.
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Post subject: Re: Virgin Money acquires Northern Rock
Posted: Sat Nov 19, 2011 9:16 pm
Diavolo Rosso
Player Coach
Joined: Jul 09 2005 Posts: 8119
I'd be interested to see what exactly has been left on the Government balance sheet in this. Given that NRs main problem was its funding structure rather than its assets, I wouldn't have thought what the Government has been left with is actually that bad quality.
Anyway, if nothing else hopefully this is the start of increased competition in retail banking. I was in the Bank of England Museum the other day and it's frankly embarrassing how little has changed in retail banking in over 400 years. Most retail banking, on the customer facing side at least, is still stuck in the 90s and we need some innovation and competition to bring it kicking and screaming in to the 21st century. Branson is the sort of guy who might be able to kick start that.
Good luck to Osborne if he thinks he can now start getting out of his Lloyds and RBS positions anyway. He'll make some impressive losses closing those out if he tries.
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