U.K. taxpayers could lose about GBP 2 billion by the time the assets of the collapsed bank Northern Rock are fully wound down, the National Audit Office (NAO) said Friday.
The NAO office expects the taxpayer to lose GBP 480 million on the sale of "good" bank Northern Rock plc to Virgin Money at the end of 2011.
"A sale of Northern Rock plc at the earliest opportunity was the best option to minimise losses on the GBP 1.4 billion of public money invested in the bank," it said.
After the nationalization of Northern Rock in 2008, it was divided into two companies. A new stand-alone bank, Northern Rock plc and Northern Rock (Asset Management) plc, which manages the assets and liabilities retained in the public sector.
The NAO said UK Financial Investments (UKFI), a body owned by the Treasury, ran the sale process of Northern Rock Plc well. Competitive tension was maintained and, in the final negotiations, UKFI improved the overall offer from Virgin Money.
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