Criteria | Virgin Consortium | Northern Rock Management |
Size of balance sheet | Total assets reduced from £109 billion (2007) to £49 billion in 2011. Total mortgage book reduced from £92 billion (2007) to £35 billion in 2011. | Total assets reduced from £109 billion (2007) to £43 billion in 2011. Total mortgage book reduced from £92 billion (2007) to £29 billion in 2011. |
New mortgage lending | New business of £3.4 billion a year in 2008-2010 and £6.7 billion in 2011. | New business of £2.5 billion to £4 billion a year up to 2011. |
Retail deposits | Increase to £20 billion by 2011. | Increase to £16 billion in 2011. |
Wholesale funding | New unsecured wholesale financing of £2 billion beginning in 2011 with £500 million increments every quarter. | New third party funding from beginning of 2011 with £500 million of wholesale borrowing. |
Profitability | First profitable year is 2009. Profits attributable to shareholders of £15 million, growing to £158 million in 2011. | First profitable year is 2009. Profits attributable to shareholders of £5 million, growing to £138 million in 2011. |
Outstanding guaranteed bonds | Issuance of £27 billion of government-backed bonds in March 2008. Bonds repaid in February 2010. | Issuance of £26 billion of government-backed bonds in September 2008, including a £5.5 billion liquidity reserve. The liquidity reserve to remain available until 30 September 2011. |
Outstanding guarantees for other liabilities | Guarantee arrangements for liabilities of £30.5 billion at September 2008, growing to £31.7 billion in December 2011. | Initial guaranteed liabilities of £29.3 billion at September 2008. All guarantee arrangements assumed to be withdrawn by April 2011. |
Surplus regulatory capital | Surplus capital ranging from £1.9 billion in 2008 to £3 billion in 2011. Cumulative impairment charges of £547 million over 2008-2011. | Surplus capital ranging from £1.4 billion (2008) to £2.5 billion in 2011. Cumulative impairment charges of £100 million over 2008 to 2011. |
Amount and source of new equity | Underwritten rights issue of £500 million at 25 pence a share plus cash injection (£500 million) and Virgin Money (£250 million) in March 2008. | Rights issue in May 2008 of £700 million at 35 pence a share. |
Treasury share in potential equity returns | Treasury to receive warrants over 10 per cent of the Company’s fully diluted share capital following completion, exercisable at 25 pence. The warrant will vest in equal tranches over the period between the second and fifth anniversaries of completion, subject to the share price exceeding 50 to 75 pence. No net proceeds in base case exit assumption. | Treasury to receive warrants over 15 per cent of the company’s fully diluted share capital following completion, exercisable at 35 pence. Warrants vest at a share price of 35 pence over a ten year term. Estimated cash proceeds to Treasury on base case exit assumptions in December 2011 of some £230 million. |