Northern Rock

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Northern Rock (LSE: NRK) is a British bank based at Regent Centre near Newcastle Upon Tyne in northern England. Formerly the Northern Rock Building Society, the bank was formed in 1997 when the society floated on the London Stock Exchange, distributing shares to its members who held savings accounts and mortgages with them. Northern Rock joined the stock exchange as a minor bank and was expected to be taken over by one of its larger rivals. However the bank has been very successful in the mortgage market and in 2000 gained promotion to the FTSE 100 Index.

Northern Rock Building Society was formed in 1965 as a result of the merger of Northern Counties Permanent Building Society (established in 1850) and Rock Building Society (established in 1865). Along with many other UK building societies, Northern Rock chose to float on the stock exchange in order to better expand their business.

The bank has a call centre operation at Doxford International Business Park in Sunderland. The company is midway through a large redevelopment of the Gosforth offices, which saw the demolition of the original 1960s tower block during Spring 2006. By 2008 a new tower block will be completed, that will act as the facade to the company headquarters. The site currently consists of the Kielder and Prudhoe buildings, completed in the early 1990s behind which lies the distinctive glass fronted Alnwick building. The main Atrium reception is adjacent to this which opens out onto the recently completed Baker Street, a large covered mall that houses a restaurant, shop and on-site branch. A number of other buildings, all named after North-Eastern castles are joined to Baker Street.

Today Northern Rock is a major mortgage lender in the United Kingdom and is the official club sponsor of local football club Newcastle United. In 2005, British independent TV channel ITV2 temporarily changed its name to ITVToon to incorporate the live broadcasting of a Newcastle United game in the UEFA Cup. Northern Rock was the main sponsor of this channel for that day.

Despite being a specialised mortgage lender, Northern Rock deal with savings accounts, loans and introducing insurance. The company offers both secured and unsecured loans, the latter though branded, being administered and underwritten by Ventura, based in Leeds. Home and contents insurance is dealt with by Legal and General, whose mortgage book Northern Rock took over. Personal Protection Insurance (PPI) can be arranged with London-based Pinnacle.

The bank's recent success can be partly attributed to its success in retaining mortgage customers after their initial deals have expired via its Mortgage Review Service. The department, under the guidance of Management Board Director Clare Brayson has seen growth from a small team of under 20 people five years ago, to a large function employing around 1,000 members of staff.

The success of the company's sales now requires growth in the Finance function, which deals with acquisition of funds for the mortgage departments to lend, hence the bank's recent appointment of two new Operational Directors to oversee development in that area.

The bank also recently announced a move into higher-risk lending via a deal with Lehman Brothers. As with the unsecured loan deal, though the mortgages will be sold by Northern Rock, the risk will be underwritten by Lehman Brothers, which will maintain the company's ethos of maintaining low-risk lending.

The current Chief Executive of Northern Rock is Adam Applegarth, who joined the company in the early 1980s as a graduate trainee. Deputy Chief Executive David Baker, who joined on a similar scheme, also takes pride in having gotten to the know the company by working as a postboy. The company is focused on developing its own staff and so, most appointments are made internally.

The company has a number of call centres in order to interface with customers, but all of these are based in Gosforth and Sunderland, and closely aligned with administration staff to ensure efficiency. Recent large investments in IT infrastructure should see the delivery of many online services in 2007, enabling customers to do more of their banking from home.

Along with sponsorship of Newcastle United, Northern Rock also sponsor rugby side Newcastle Falcons,Durham County Cricket and Middlesex Cricket sides. The company's pride in its sponsored teams is demonstrated by a number of paintings depicting them around the Gosforth offices.

Their mascot, featured on a lot of their advertising merchandise, is a frog known as Romeo. Some adverts feature his partner, Juliet and before mortgage regulation in 2002 altered the names of the products, an elderly pair of frogs named Erm and Herm were being developed. These were based on the acronyms for Equity Release Mortgages, which are now known as Lifetime mortgages.

Northern Rock also have branches in Ireland, and as just announced, in Denmark. A sub division in Guernsey handles offshore savings and investment accounts.