Lloyds deal will leave Northern Rock with low quality debt

Commenting on the announcement that Northern Rock customers will be encouraged to re-mortgage with Lloyds TSB when they come to the end of their deals, Liberal Democrat Shadow Chancellor, Vince Cable said:

"Selling its best mortgages to Lloyds TSB will leave Northern Rock with only the lowest quality mortgages on its books.

"This will help Northern Rock to make its first repayments on the £25bn it owes the Government, but could put later payments at risk.

"Ministers have never come clean about Northern Rock’s mortgage book, which I have long believed contains a substantial amount of bad debt.

"This deal will not resolve what to do about the awful inheritance from the bank’s previous management, who drove the bank to the wall."