Britain sees a bank run


Northern Rock Customers Queue for Cash

By Emma Thelwell
The Telegraph, London
Friday, September 14, 2007;jsessionid=XBV5D2AH3XHJZQFIQ...

The credit crisis spilled onto Britain's high streets today as worried Northern Rock customers queued up to withdraw their savings.

Their fears were prompted by the revelation this morning that Britain's fifth-biggest mortgage lender had to ask the Bank of England for emergency financial assistance.

Despite Northern Rock's assurances that there was no need for customers to panic, queues continued to build steadily at the London branches visited by the Daily Telegraph today.

For 65-year old Tony Looch, with savings of £135,000, the lender's calming words were not enough.

"I'm prepared to wait as long as it takes. I'm taking the lot out, if they'll let me have it," said Mr Looch, who was queuing outside the bank's Moorgate branch, in the heart of the Square Mile.

"I'm absolutely appalled that they should be so badly run and so badly regulated. I thought they were totally reliable and secure -- they're supposed to be regulated these companies."

Northern Rock shares had plunged more than 20 percent by early afternoon after the lender slashed its profit forecasts and admitted it was seeking help from the central bank.

Based in Newcastle, Northern Rock has 76 branches around the UK, has about 1.4 million savers, around 800,000 mortgage customers, and retail deposits of £24 billion.

Earlier in the day, Adam Applegarth, the company's chief executive, sought to calm the nerves of customers and shareholders alike: "In these extreme times we are pleased to have a high quality asset based and remain confident in the excellence of our strong customer franchise, our efficient business platform and our well-known brand."

However, the words appeared to carry little weight with the more than 200 people lining up outside Northern Rock's branch in Kingston, Surrey.

One pensioner, who did not want to be named, told The Daily Telegraph: "I am 65 and my husband is 72. We are queuing because we have substantial amounts of money invested in Individual Savings Accounts with Northern Rock.

"They say don't panic but it will be too late if things go wrong. I know that you need to keep level headed about these things, be we are not youngsters who can afford to lose this money."

Vasily Smirnov, a financial planning advisor from rival bank Abbey in Kingston, was handing out leaflets to Northern Rock customers advertising Abbey's super saving range.

An Abbey spokesman said: "Clearly Abbey staff are taking the initiative and ensuring Northern Rock customers are aware of other highly competitive savings deals."

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