Northern Rock, which demutualised from being a building society two years ago, is Britain's 12th biggest bank and has a stock market value of £1.8 billion sterling (£2.2 billion).

In April 1997, Northern Rock Building Society members voted overwhelmingly to convert to a public limited company. At the time, Northern Rock was the Britain's fourth largest building society and 885,764 qualifying recipients each received 500 free Ordinary Shares in Northern Rock plc.

Since it floated, however, Northern Rock shares have performed dismally and are currently almost 13 per cent below the October 1997 flotation price. As with other former building societies such as Alliance & Leicester, Halifax and Woolwich, the Newcastle-based Northen Rock is seen as a likely takeover target in the rationalisation of the British banking industry.

The bank's core business remains mortgage lending which is distributed to retail customers through a network of 105 branches - now to be thinned down to 76 branches - as well a telephone-based lending operation. On the savings side, Northern Rock provides a range of branch, postal and telephone-based accounts while a subsidiary in Guernsey provides an offshore savings service.