Northern Rock has confirmed that it is to be restructured into two separate companies (SCI passim) - Northern Rock and Northern Rock (Asset Management). The lender says the move will help it build a stronger future and deliver value to the taxpayer.

Northern Rock will become a new savings and mortgage bank, holding and servicing all customer savings accounts and some of its existing mortgage accounts. The bank will continue to offer savings and mortgage products.

Northern Rock (Asset Management), on the other hand, will hold and service the balance of the lender's mortgage and unsecured loan accounts. This company will not offer any savings products or new loans.

Both companies will remain in government ownership following the restructuring, which is expected to be completed by the end of the year. The plans are subject to obtaining approval from the European Commission and the UK Financial Services Authority.