| Saviour of the Abbey bids to work another miracle
'Have we managed to turn banking on its head? No. Have we given up the dream? No.' So said Luqman Arnold in August 2004 as he discussed his two-year campaign to turn around Abbey National. Three years on, he is hoping to resurrect that dream with Northern Rock, having emerged at the head of one of a lengthening list of teams hoping to persuade the Treasury and the Bank of England that it can get the stricken bank back on track. His proposal is unusual: unlike rivals such as JC Flowers or Virgin Money, Arnold is not proposing a bargain-basement acquisition of the entire company; instead, he is proposing to keep it going while he and a team of experts parachute in to mount a restructuring. Not surprisingly, his proposal has already won the support of those shareholders who risk being all but wiped out under the rival bids.
(AFX UK Focus) 2007-11-19 07:25 GMT: Key Northern Rock investors want sale halted, name new management- report UPDATE
(Adds report from Daily Telegraph) LONDON (Thomson Financial) - Some of the major shareholders of Northern Rock PLC are planning to propose to chairman Bryan Sanderson that the embattled bank should halt its sale process and install a management team headed by Luqman Arnold, former chief executive of Abbey National, the Financial Times newspaper reported. SRM Global, a hedge fund run by former UBS trader Jon Wood, and other institutional shareholders will put forward their proposals to Sanderson this week, it said. SRM and RAB Capital, which have a combined 13 pct stake in the bank, have opposed the sale, according to the the Sunday Times newspaper. "We have repeatedly made it clear to the board that this sale process should be stopped. The process has become a farce which is damaging the franchise of Northern Rock and the UK banking system," the newspaper quoted Jon Wood, head of SRM, as saying.
Silence at the Abbey as customer service dives
Just what is going on at Abbey? Why are so many people complaining about its service? A lot of customers - including many Cash readers - would like to know. And so would I. In the past six months, I have received nearly twice as many letters about Abbey as any other banking group. But no senior person at Abbey would answer my questions last week because, the bank says, the chief executive is having dinner with personal finance editors in a fortnight's time. It might answer my questions after that, but not before. This is just the sort of inexcusable delay that Abbey customers have come to expect. Customer Jackie Brown spent three months trying to persuade Abbey to update her address, while Peter Corley waited nine weeks for his pounds 14,500 cash Isa to be transferred to Abbey, which twice lost the transfer form and then the original application form as well.
Banker's Northern Rock salvage plan
A former boss of Abbey said that he was working on a possible salvage plan for stricken mortgage bank Northern Rock. Luqman Arnold - regarded as one of the City's most experienced bankers - is preparing a proposal that does not involve the sale or break-up of the Newcastle-based business. Mr Arnold will use a heavyweight team of banking experts to work alongside existing management in an attempt to save the ailing bank. .
IT migration disrupts services for Abbey
UK bank Abbey has acknowledged that service to customers has been disrupted as it grapples with migrating to a "state of the art" core banking system. Abbey's parent company, Spanish banking group Santander, is migrating the UK bank to its Partenon global banking system, in what the bank says is the largest IT project of its type in the UK. The bank said only a small number of customers had been affected. But staff say they are under pressure because of difficulties with the roll-out. Linda Rolf, general secretary at the Abbey National Group Union, said, "I am aware of the system problems and we have discussed it with management. The systems are improving and will improve further." .
Former Abbey boss may bid for Northern Rock
A fourth potential bidder for Northern Rock has emerged - a group led by former Abbey boss Luqman Arnold. Olivant, a private equity firm run by Arnold, has contacted the bank and regulators about a salvage plan. It is understood to want 20% of the business and effective control with the promise that his expertise from stints at Abbey and investment bank UBS Warburg will be enough to transform Northern Rock's prospects. Last night the Northern Rock board was considering the bid as a fall-back option in case the other proposals fail. The bank's chairman Bryan Sanderson is believed to welcome Arnold's interest, but is waiting until an informal deadline for bids, set for this Friday, has passed before assessing its merits. Arnold came to prominence when he was parachuted into Abbey five years ago after it revealed large losses from its wholesale banking operations.
Customers lament Abbey's bad habits
Just what is going on at Abbey? Why are so many people complaining about its service? In the past six months, I have received nearly twice as many letters about Abbey as any other banking group. But no senior person at Abbey would answer my questions last week because, the bank says, the chief executive is having dinner with personal finance editors in a fortnight's time. It might answer my questions after that, but not before. This is just the sort of inexcusable delay Abbey's customers have come to expect. Jackie Brown spent three months trying to persuade Abbey to update her address, while Peter Corley waited nine weeks for his £14,500 cash Isa to be transferred to Abbey, which twice lost the transfer form and then the original application form as well. The bank admitted something had gone wrong but could find no systems errors and "no obvious cause".
(AFX UK Focus) 2007-11-16 11:44 GMT: Northern Rock expects to receive 6-8 takeover proposals - report UPDATE
(Adds detail, background) LONDON (Thomson Financial) - Northern Rock PLC expects to receive between six and eight proposals to buy all or part of the struggling banking group by today's preliminary bid deadline, the Financial Times reported. The bank and its advisers Blackstone, Citigroup and Merrill Lynch have set today as the deadline for indicative proposals, with US buyout firm JC Flowers LLC, Sir Richard Branson's Virgin Group and hedge fund Cerberus Capital Management among those expected to bid for the entire bank. A fourth approach is expected from Olivant, the investment group led by former Abbey chief executive Luqman Arnold, which said this week that it intended to buy a stake in Northern Rock and work on stabilising the bank. Press reports have previously named US buyout firms Lone Star and Apollo as other potential acquirers of Northern Rock.
|
