Reuters – The government is considering injecting as much as 10 billion pounds into Northern Rock to use the nationalised bank to ramp up mortgage lending, the Daily Telegraph reported.

The Treasury has yet to make a final decision on the plan, which may also see the bank hiring new staff, the newspaper reported in its Friday edition.

Spokesmen for the Treasury and Northern Rock, which is due to unveil a new business plan in the next few weeks, could not immediately be reached for comment.

Northern Rock became the first British casualty of the credit crunch in September 2007 when the bank, heavily dependent on wholesale markets for its funding, revealed that it had been forced to seek emergency support from the Bank of England.

The bank was nationalised in early 2008 after attempts to find a private sector buyer fell through.

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Tags: attempts, bank-of-england, business plan, casualty, credit crunch, daily-telegraph, emergency support, final decision, mortgage lending, nationalised bank, new-business, private sector, reuters, spokesmen, treasury, wholesale, wholesale markets

nebusiness.co.uk – LLOYDS Banking Group became the latest casualty of the bank sector sell-off yesterday as its shares plunged as much as 47%.

Royal Bank of Scotland steadied a little after Monday’s mammoth 67% fall, but doubts over the Government’s second bank bail-out and renewed fears for the sector’s health dragged its rivals lower.

Lloyds, created this week from the merger of HBOS and Lloyds TSB, was the worst hit, followed by Barclays down nearly 20%.

The falls extend losses across the sector in light of news that RBS expects to report record annual losses, but also comes in the wake of the recent expiry of the short-selling ban.

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Tags: banking-group, barclays, casualty, doubts, expiry, fears, hbos, health, lloyds tsb, losses, merger, rbs, rivals, royal-bank-of-scotland