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Is Northern Rock a viable business?

While there was a very strong argument as to why the UK government initially stepped in to save Northern Rock from collapse, i.e. saving the overall banking system from collapse, many people are starting to wonder if it is actually a viable business. Despite suggestions in the press that the company was ahead of schedule with regards to the repayment of substantial taxpayer subsidies, it appears now that with the company set to be split into two, further significant taxpayer subsidies will be required.

When you bear in mind the initial bailout cost was something in the region of £25 billion, and many expect a further £3 billion to be supplied from taxpayer funds, should the business not be sold on as a going concern rather than split into two?

The idea that the business will be split into something resembling a traditional bank and a mortgage provider will inevitably see one operation dominated by potentially bad mortgage loans and the other saddled with potentially bad personal loans. Would it not be sensible to either sell on the business as it is now or ask other banking groups to bid for different areas of the operation?

The UK government certainly has many questions to answer with regards to Northern Rock and its future.

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