Northern Rock problems - customers queue to get their money

Filed Under Finance

Confidence is starting to become a scarce commodity with Northern Rock customers today. Fearing the worst, many people have been queuing outside branches to withdraw their money from the ailing bank.

Apparently so many customers were logging into their accounts on Northern Rock’s web site this morning, that it couldn’t handle all the traffic.

Confidence in Northern Rock is also in short supply with City investors too. Northern Rock’s share price is currently down 25 percent.

As Chancellor Alistair Darling said this morning, Northern Rock is basically a sound company - though many people are questioning some of their recent decisions and strategies. That is why the Bank of England offered emergency finance yesterday.

However confidence is key and it when it drains away even sound companies can flounder. I wonder if we are seeing the end of Northern Rock as an independent company. With its share price at bargain basement levels, it has to be attractive to predators looking to snap it up.

Confidence, or the lack of it, is making a bad situation worse for Northern Rock.