Arnold confirms proposal for Northern Rock

by Richard Kilner

Story link: Arnold confirms proposal for Northern Rock

Luqman Arnold, formerly boss of Abbey, has confirmed he is preparing a plan to rescue troubled bank Northern Rock, following the firm’s difficulties in the wake of the first run on a British bank in over a century.

In the last two months there has been a significant fall in mortgage lending, and customers have withdrawn approximately £10bn from the bank.

Arnold is seen as one of the City’s big hitters, and is looking to lead a top team of experienced bankers to work together with the existing management of Northern Rock in an effort to salvage the business.

Arnold’s team will be taken from Olivant, (his financial services investment business), and will take a minority stake in Northern Rock.

So far Arnold’s proposal is the only plan put forward that would keep Northern Rock intact, neither breaking it apart nor selling it on.

It is believed to be the case that Arnold has engaged in informal discussion with the bank’s chairman, Bryan Sanderson, and that Arnold’s proposal will not be the only one considered by Northern Rock.

There are other plans on the table for the ailing business, including a consortium led by Virgin Group and the US firm JC Flowers.