Northern Rock plc will be regulated as a deposit taker and mortgage lender. It will hold and service retail savings balances of approximately £19bn and approximately £10bn of residential mortgages. It will offer new savings products and new mortgage lending.

Northern Rock (Asset Management) plc will hold and continue to service a residential mortgage book of approximately £50bn. It will be authorised and regulated by the FSA as a mortgage provider and will no longer undertake any new mortgage lending.

Gary Hoffman, chief executive of both companies, said: “This helps to build a stronger future and delivers value to taxpayers. We are currently writing to all customers to confirm that we will continue to hold and service their mortgage or personal loan accounts.”

Reports today have suggested that National Australia Bank is considering launching a bid for Northern Rock plc and has consulted advisers including Citigroup, Lazard, Credit Suisse and Morgan Stanley on the idea.

Meanwhile, Standard & Poor’s Ratings Services assigned its ‘A-/A-2’ counterparty credit ratings to Northern Rock PLC. It described its outlook as stable.

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Richard Barnes, credit analyst at Standard & Poor’s, said: “The ratings on Northern Rock reflect our view of its robust asset quality, funding, liquidity, and capitalization. We consider that these attributes have been achieved as a result of the restructuring, which was designed to enable Northern Rock to make a fresh start with legacy risks left behind in NRAM.”