Northern Rock's board of directors is meeting to agree to the deferment of the interim dividend totaling £59 million, announced in July 07 just prior to the impact of the credit crunch. The dividend amounts to 14.2p per share and would represent 8% of the current value of the company.

This is another hit to Northern Rock shareholders that have been hit hard by a slump in the share price from £12.50 earlier in the year to today's price of £1.65, a fall of 87% !

The deferment of the dividend is seen as an attempt at making the bank more appealing to potential takeover suitors. Earlier in the day the government had appointed Goldman Sachs to advise on options available. However, it is highly probable that this dividend will never be paid, especially if the bank is broken up and sold off in chunks.

By Phillipa Green

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