Northern Rock and B&B ‘bad banks’ to merge

Bradford & Bingley and Northern Rock are set to merge in a move aimed at benefiting taxpayers.

The pair, which are both owned by the taxpayer, are set to be brought under one holding company with a single management team.

The move between mortgage lender Bradford & Bingley and Northern Rock, now Northern Rock (Asset Management), is designed to cut costs and bring greater efficiencies for the taxpayer.

However, there are fears that the bringing together of the two loan books could lead to job losses and B&B moving out of its historic home of Bingley and nearby Crossflatts, both in West Yorkshire.

Both companies would remain as separate legal entities with their own balance sheets, liabilities and government support arrangements.

There is no firm timetable to complete the plan.

Richard Banks, managing director of Bradford & Bingley, said: “Creating a single holding company is the right way to move forward to support our goal to protect and create value for UK taxpayers.

“The integration process will be extensive and in the meantime, we will continue to work towards our business objectives and provide a high quality service to our customers.”

The change will not affect customers of the two businesses.

Bradford and Bingley and Northern Rock were split into “good” and “bad” parts in the aftermath of the banking crisis.

Bradford and Bingley’s better half went to Santander, while Northern Rock was split into Northern Rock Asset Management (NRAM) and Northern Rock plc.