The troubled British bank Northern Rock, which had to be saved from collapse by the government, has been split into two parts.
Monday was the first day of business for the two parts of the bank, which formally split on Jan. 1.
The bank was saved from collapse by the government in February 2008, when it became the first British victim of the global financial crisis and the two parts are now wholly-owned by the state.
The part of the former Northern Rock which is most likely to attract buyers has been renamed Northern Rock plc, and has 19 billion pounds of
savings and 10 billion pounds of mortgages. It is able to make loans and accept deposits.
It contains the successful part of the former Northern Rock. When Northern Rock was fully nationalized in early 2008, to prevent the first run on a British bank since the 19th century, the government guaranteed savings.
That guarantee will still apply to the new banks, but it could create unfair competition for other banks and mortgage lenders.
Northern Rock plc said in a statement: "The Government guarantee of the retail savings transferred to Northern Rock plc remains in place."
"Given the new bank's strong capital and liquidity position, the guarantee is being reviewed by HM Treasury and the Financial Services Authority ... Any decision to release the guarantee will be subject to a three-month notice period and fixed term deposits will retain the guarantee for the existing term of the product," it added.
The second part of the bank is now called Northern Rock (Assets Management) plc, and contains all the riskiest assets of Northern Rock. It will not make loans or accept deposits. It has about 50 billion pounds in mortgages and 4.5 billion pounds of unsecured loans.
Gary Hoffman, chief executive, said in a statement: "We have successfully completed the legal and capital restructure of the business.
This helps to build a stronger future and delivers value to taxpayers." Media reports labeled Australia's National Australia Bank (NAB) as being interested in Northern Rock plc. NAB currently owns the Clydesdale and Yorkshire Banks in Britain.
Another potential suitor is Virgin Money, part of entrepreneur Sir Richard Branson's Virgin Group. Virgin failed in a bid to buy Northern Rock before it was nationalized in 2008, and is said to be keen to enter the banking market in Britain.
Figures from October showed that Northern Rock had a 5.5- percent share of the British mortgage market, compared to 7.5 percent at the end of 2007 prior to nationalization. Since the takeover of Northern Rock, the government has also moved to take control of mortgage lender Bradford & Bingley, and to build up an 84-percent stake in the Royal Bank of Scotland and a 43-percent stake in Lloyds Banking Group, all of which were victims of the financial crisis and in danger of collapse.