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Despite the fact that British Telecom has already reduced its staffing numbers the company has today announced plans to offer up to a 1 year holiday in exchange for staff taking a 75% pay cut. The...
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Tuesday 5th August 2008
While there has been a number of more positive financial stories in the press of late with regards to the mortgage sector, the latest rumours surrounding Northern Rock are suggesting that the group could soon announce losses of £500 million. The rumour mill seems to be in full swing because as well as supposedly set to announce a record loss the bank will also confirm that ‘just’ £19 billion of the near £30 billion loan from the government is outstanding.
However, the bank admits that many of their mortgage customers are struggling at the moment with one in five set to slip into negative equity over the next 12 months. Let’s not forget that this is the bank which was handing out 125% mortgages at the height of the market and is surely set to pay a hefty price for this high risk approach.
Even though the bank has reduced it exposure to the mortgage market by pushing many mortgage customers to repay their loans in full and move to another lender, there are concerns that it has been left with poor quality business. Good progress has been made on the outstanding loan but it looks as though the good run may be about to end. |
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