July 25, 2007: Soon-to-Fail Northern Rock Announces Good Results

Northern Rock, a large British bank specializing in mortgages, issues an upbeat set of trading results, saying the outlook for its business is “very positive.” It reveals it has sold a record volume of mortgages in the first half of 2007, up 47 percent on the same period a year before. This gives it a 19 percent share of the new mortgage market, making it the market leader in Britain. It also announces a small increase in interim profits and pledges to increase dividends by 30 percent. However, it notes that “sharp increases” in borrowing rates in the money markets are likely to make life more difficult and that changes in “interest rate and credit risk environments” will influence the size of its annual profits. [BBC, 8/5/2008]