Nine a.m. Monday, and still no statement. Either they get up late in Crockland, or the (bad) penny is taking an awfully long time to drop.
Since the back end of last week, Northern Rock spokespeople have stated repeatedly that the bank intends to deliver its pre-announced interim dividend to shareholders. That’s 14.2p a share to those investors still on the register by Wednesday, costing £59m in total.
The divi was declared in July and is payable on October 26.
Note the use of the word “payable.” Rock cheerily admits that it has taken legal advice, which says it does not necessarily have to pay an announced dividend – as if such legal advice was even required in the first place. This is rudimentary stuff.
The bank had to borrow £3bn from taxpayers last week to continue operating. It will be back at the Bank of England this week, asking for more. And next week. And the week after that.
It has been pointed out that, as shareholders in their own right, chief executive Adam Applegarth and his board colleagues will benefit personally from the divi payment.
But that’s not the point.
Making an interim payment of £59m amounts to a direct transfer of cash from the public to Rock’s investors.
That’s not a matter of moral hazard. It’s a matter of when someone calls the police.