Bids for Northern Rock need to be submitted in the next 24 hours or so.
Sir Richard Branson's Virgin Money made an offer for the nationalised lender this evening. NBNK, the new bank run by the former Northern Rock boss Gary Hoffman, is likely to put in a offer in the coming hours. Under the terms of his departure from Northern Rock, Hoffman had originally been prevented from bidding for Northern Rock until next month although that restriction was lifted a fortnight ago to allow a bid to be made.
But, crucially, NBNK is expected to make its offer contingent on being successful in its offer for the 623 Lloyds Banking Group branches up for sale.
NBNK is thought to want to hammer the Lloyds branches and the Northern Rock branches together to achieve the 6% market share that the Independent Commission on Banking has highlighted as creating strong competitor to the existing players on the high street.
With the NBNK bid on the table for Lloyds, the bailed-out bank is thought to be awaiting a decision from the Co-operative Group before deciding whether to sell or float the operation on the stock exchange.
The government is keen to sell off Northern Rock to demonstrate that some sort of normality is returning to the banking sector while Lloyds must sell the branches – codenamed Verde – to meet EU rules on state aid.
Even if these sales are pulled off, the taxpayer will remain the owner of UK Asset Resolution - which comprises some of Northern Rock's mortgage book and that of Bradford & Bingley - and its stakes in Royal Bank of Scotland and Lloyds for some time yet.
