Rock adviser dumped over conflict fears
Northern Rock has ditched Morgan Stanley as preferred choice for adviser on its future and decided to hire Deutsche Bank instead.
Rock and a hard place: Morgan Stanley were acting for Northern Rock and potential buyer NAB.
The mortgage lender and UKFI, which manages the Government's stakes in bailed out banks, were concerned about a potential conflict of interest at Morgan Stanley.
The Wall Street bank is already involved in helping National Australia Bank (NAB) assess the future of its UK retail operations, which comprise Clydesdale and Yorkshire banks.
The decision by the Rock and the Government not to hire Morgan Stanley at the 11th hour is embarrassing for the US bank, since it appears that it failed to fully disclose any potential conflicts of interest.
When the Rock began its beauty parade for strategic advisers to help on its return to the private sector, several other banks ruled themselves out because of conflicts.
The concerns are understood to stem from the fact that some financial buyers would like to merge Rock assets with those of another retail bank and could potentially be interested in Yorkshire and Clydesdale. Morgan Stanley declined to comment.
Deutsche Bank will be pleased to secure such a high profile mandate.
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