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02 August 2010
On 02 August 2010, notice was given that the guarantee arrangements in place for Northern Rock plc’s wholesale liabilities will end on 02 November 2010. The fixed term wholesale liabilities that were in existence at 01 January 2010 will continue to be guaranteed until maturity.
The current beneficiaries under these wholesale guarantees are Northern Rock (Guernsey) and the Northern Rock Foundation, who both have funds on deposit with Northern Rock plc. This announcement does not affect the wholesale guarantee arrangements in place for Northern Rock (Asset Management) plc.
On 24 February 2010 notice was given to end the temporary Government guarantees covering Northern Rock’s retail deposits. These guarantees were lifted at 5pm on 24 May 2010.
Retail deposits in Northern Rock are therefore no longer covered by the Government guarantee. This excludes fixed term deposits in accounts existing at 8am on 24 February 2010, which will be guaranteed to their maturity as of that date.
Going forward, every Northern Rock retail customer will continue to have the first £85,000 of their total deposit protected by the Financial Services Compensation Scheme (FSCS), whether their deposit is fixed-term, non-fixed term or a combination of both. This is the same level of protection that is provided for retail customers of all banks and building societies in the UK. Customers of Northern Rock (Guernsey) will continue to benefit from the Guernsey Banking Deposit Compensation Scheme.
The removal of retail deposit guarantee follows the restructuring of Northern Rock that took place on 1 January 2010 following a Transfer Order made on 8 December 2009. As a result of the Transfer Order, Government guarantees in relation to Northern Rock were restated to apply to the two entities.
