The nationalisation and resale of Northern Rock will rake in a profit of up to £11bn for UK taxpayers, it was announced today.
UKFI, the body set up to control the government's stake in bailed out financial institutions, said in a report that taxpayers are set to receive a net profit of up to £11bn from the nationalisation and consequent sale of Northern Rock to Virgin Money.
But taxpayers might have to wait to 15 years to receive profits.
"This cash is expected to be returned over a period of around 10 to 15 years from 2012 as Northern Rock Asset Management Plc is run-down and the remaining Government loan is repaid," said UKFI.
The £11bn profit calculation is based on subtracting the amount in cash taxpayers will eventually receive - estimated to be between £46bn and £48bn - from the £37bn in funding the Government has provided to Northern Rock.
The run on Northern Rock in 2007 signalled the start of the credit crunch. The bank was subsequently bailed out in 2008.
In 2011, Virgin Money completed the purchase of Northern Rock's core business for between £747m and £1bn.
To read the UKFI report click here
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