Northern Rock Portfolio Declines, UK Stocks Fall

123jump.com Staff
03 Mar, 2009
New York City

U.K. construction activity falls in February. Northern Rock residential mortgages portfolio declines 27% to

[R]1:00PM New York, 6:00PM London - U.K. construction activity falls in February. Northern Rock residential mortgages portfolio declines 27% to £66.7 billion in 2008.[/R]

London stocks fell 3% after a private report showed that the country’s construction activity fell markedly in February.

Deteriorating earnings results from Northern Rock, which reported that residential mortgages weakened 27% to £66.7 billion.

In London trading FTSE 100 index declined 3.1% or 113.74 to 3,512.09.

Of the FTSE 100 index stocks, 14 increased, and 88 declined. Standard Chartered led advancers in the index shares with a rise of 7.3%.

U.K. Construction Activity Falls in February

Chartered Institute of Purchasing and Supply reported today that the CIPS/Markit Construction Purchasing Managers'' Index fell 27.8 in February.

A reading below 50 shows contraction while a measure above 50 reflects expansion.

Director of CIPS Roy Ayliffe said, ""Abysmal February data from the UK construction sector marks a whole year of decline in the industry and has put paid to any hopes of improvement following a slight rise in the PMI index last month. It''s safe to say that the construction sector is some way off being out of the woods as it continues to struggle with extremely weak demand.""

Northern Rock Residential Mortgages Portfolio Falls

Northern Rock reported today in its financial results ended December 31 that residential mortgage balances fell 27% to £66.7 billion from £90.8 billion a year earlier.

Retail deposit balances soared to £19.6 billion from £10.5 billion a year ago.

The lender said the deterioration in credit quality resulted in significant increases in impairment provision charges to £894.4 million on retail customer loans.

Northern Rock had a pre-tax loss of £1.4 billion million in the review period from a loss of £167.6 million a year ago.

In addition, the amount of money due to the government declined from £26.9 billion at the end of December 31 to £8.9 billion.

Gainers & Losers

Standard Chartered led advancers in the FTSE 100 index shares with a rise of 7.3% followed by increases in Kingfisher of 4.4%, in Amlin of 4.1%, in Old Mutual of 2.7%, and Admiral Group of 2.3%.

International Power led decliners in the FTSE 100 index shares with a fall of 8% followed by losses in Lloyds Banking of 7.9%, in Cairn Energy of 7.4%, in Liberty International of 7.2%, and Prudential Plc of 7.1%.

Europe Markets Review

In London FTSE 100 Index closed lower 113.74 or 3.14% to 3,512.09, in Paris CAC 40 Index decreased 26.91 or 1.04% to close at 2,554.55 and in Frankfurt DAX index lower 19.35 or 0.52% to close at 3,690.72. In Zurich trading SMI decreased 80.27 or 1.81% to close at 4,358.00.