Ron Sandler, boss of newly nationalised Northern Rock, will this week reveal plans to cut between 2,000 and 2,500 jobs as the stricken lender is shrunk in an attempt to repay its £25bn taxpayer loan within three years, reports The Telegraph .
The business plan for the state-owned bank will be submitted to European regulators for clearance on Monday. Mr Sandler will unveil a strategy to scale back mortgage lending while luring in new retail savings in an attempt to make Northern Rock attractive to potential future buyers.
Sources said he will almost halve the £113bn loan book by writing fewer mortgages and, over time, by selling packages of assets like the £2.2bn of equity-release mortgages offloaded to JP Morgan in January.
Gold and oil prices shot up to hit fresh record highs overnight as turmoil in stock markets intensified, with news that Bear Stearns, America's fifth largest bank, has been sold to JP Morgan at a knockdown price, reports The Guardian.
The news sent the US dollar tumbling to a record low, leading investors to seek shelter in gold and commodities. The dollar fell to ¥95.72, the lowest since August 1995, in Tokyo before recovering to ¥96.84 later. Against the euro, the dollar fell to $1.5851 from $1.5676 on Friday.
The US Federal Reserve cut its discount rate on Sunday and made more money available for banks to secure short term loans in an attempt to stem the dollar's decline, but only managed to prop it up temporarily.
The price of spot gold jumped by more than 3%, hitting a new record of $1,030.80 an ounce.
The pipeline of UK flotations for the London stock market has dried up, with investment bankers predicting no sign of a recovery until the autumn, reports The Times.
Figures provided by the London Stock Exchange show that there were just three flotations of UK firms in January and February.
They raised £29 million between them. By contrast, before last summer’s credit crunch, initial public offerings (IPOs), which provide bread and butter work for City brokers and other institutions, were running into double figures almost every month and raising billions of pounds of fresh funds.
December, the only month since August when such totals were again reached, was artificially inflated by Kazakh miner Eurasian Natural Resources, which raised £1.5 billion.
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