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Northern Rock Building Society

The Northern Rock Building Society was a mutuality based building society which dealt with financial products such as mortgages, credit cards, savings accounts, insurances and investments. Northern Rock Building Society was originally established in the year 1965 as a result of the merger between Rock Building Society and the Northern Counties Permanent Building society.

During the financial crisis which arose due to the defaulting of sub prime loans, the bank floated shares at the London Stock Exchange and raised money through the shareholders. Through this action, the Northern Rock Building Society lost its mutuality status. Following this, the northern rock building society became northern rock bank plc. The bank now comes under public ownership. In an effort to save the bank from becoming bankrupt, the bank was nationalised in 2008. The bank operates with its head office located in the posh locality of Regent Centre at Newcastle upon Tyne.

The bank lost most of its money when it entered into a deal with Lehman Brothers to enter the sub prime Mortgage market. Even though the mortgages were lent on the name of Northern Rock, the risks were underwritten by Lehman Brothers. With the fall of Lehman Brothers, Northern Rock too lost a huge amount of money. The nationalisation of the bank happened due to unsuccessful bids to save the bank. Both the bids failed as they were unable to return the taxpayer’s money. After nationalisation, the northern rock bank plc has been de listed from the London stock exchange. In terms of gross lending, Northern Rock is in the top five mortgage lenders presently operating in the United Kingdom.