The Government is set to recoup £747-million of taxpayers' cash following the announcement that Northern Rock is to be sold to Virgin Money.
The sale, which has the potential in the future to be worth over £1-billion, represents a significant step in returning public sector stakes in banks back to the public sector.
The sale is in the best interests of the taxpayer, secures the long-term future of the company and will increase competition in the banking sector. It forms part of the Government's wider strategy for the banking sector with safer ring-fenced banks and more competition for customers.
The combined business of Northern Rock and Virgin Money will establish a new competitor in the UK retail banking sector and, in doing so, will lead to an increase in choice for high-street customers. It will help increase diversity in the retail banking sector as Virgin Money seeks to innovate and expand into new market segments.
The Chancellor of the Exchequer, the Rt Hon George Osborne MP said:
"The sale of Northern Rock to Virgin Money is an important first step in getting the British taxpayer out of the business of owning banks.
"It represents value for money; will increase choice on the high street for customers; and safeguards jobs in the North East."