Wednesday, 20 August 2008

Northern Rock reprise?

I see that
"The Alliance & Leicester (A&L) bank has warned of "significant external risks" to itself if Banco Santander's planned takeover is rejected by shareholders.

More than 560,000 A&L shareholders are being urged in a letter to support the £1.3bn takeover, announced in July.

Roy Brown, the bank's acting chairman, said if the deal did not go through then the bank would be exposed to the worsening economic slowdown.


The bank goes out of its way to warn that it is "acutely aware" that its financial position may become even weaker because of the credit crunch.

And it hints strongly that, on its own, its finances might be weakened further.

"The A&L Board also recognises the risk that further shocks to the financial system created by unfavourable developments at other financial institutions could generate widespread general adverse sentiment towards financial groups like A&L," the bank said.

"The A&L Board has concluded therefore that there is a risk of external events further eroding shareholder value and that the value to A&L shareholders of the greater certainty provided by being part of a larger organisation is considerable," it added."
Is the A&L the next bank to reach breaking point?

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