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• Rate fixed at 2.50% gross* per annum until 15 August 2011

Northern Rock Ireland has launched a new issue of its Direct Saver Fixed Rate Bond offering a fixed rate of 2.50% gross* per annum (2.25% gross monthly) fixed until 15 August 2011.

Direct Saver Fixed Rate Bond Issue 26 offers a guaranteed return on balances from €1,000. This strictly limited issue savings bond will be withdrawn without notice once fully subscribed. Once withdrawn, no further deposits will be accepted.

Additional deposits can be made during the offer period up to the maximum limit of €3 million per account holder. The minimum deposit required to open the account is €1,000. Should the need arise funds can be withdrawn during the fixed rate period. A charge equivalent to 60 days' gross interest on the amount withdrawn will apply.

Interest can be paid annually on 15 August, or monthly, on the last day of the month (available first business day of the following month).

Information packs can be obtained by telephoning 1 850 315 115. Further product details and application forms are also available at Northern Rock's Ireland website www.northernrock-ireland.ie.

^*GROSS is the rate of interest paid to eligible non-taxpayers without deduction of tax. Please note interest will be paid net of tax unless you are eligible to receive interest gross and submit the required registration form to us.

^**AER stands for Annual Equivalent Rate and shows what the interest rate would be if interest was paid and added to the capital balance each year.

MORE INFORMATION AT NORTHERN ROCK'S IRELAND WEBSITE.

www.northernrock-ireland.ie

Notes to Editors

Northern Rock plc is a new bank, authorised by the FSA as a deposit taker and mortgage lender from 1 January 2010. It holds and services around £19bn of savings balances and £10bn of mortgage accounts. It offers new savings and mortgage products.

Northern Rock opened an office in Dublin in November 1999, initially offering a variable rate demand account, Direct Saver, for personal customers. Since then, other competitive personal and business savings products have been added to the range, and Northern Rock Ireland (now part of Northern Rock plc) now offers a number of accounts for individuals, businesses and credit unions. Personal customers can now invest in accounts such as Demand Online, an internet-based account, and Direct Silver Savings, an account available exclusively for the over 50s.

Media Contacts

• Rate fixed at 2.75% gross per annum until 15 June 2011

Northern Rock Ireland has launched a new issue of its Direct Saver Fixed Rate Bond offering a fixed rate of 2.75% gross per annum (2.50% gross monthly) fixed until 15 June 2011.

Direct Saver Fixed Rate Bond Issue 25 offers a guaranteed return on balances from €1,000. This strictly limited issue Bond will be withdrawn without notice once fully subscribed.

Additional deposits (minimum €1,000) can be made during the offer period up to the maximum limit of €3 million per account holder. Should the need arise funds can be withdrawn during the fixed rate period. A charge equivalent to 60 days' gross interest on the amount withdrawn will apply.

Interest can be paid annually on 15 June, or monthly, on the last day of the month (available first business day of the following month).

Information packs can be obtained by telephoning 1 850 315 115.

Further product details and application forms are also available at Northern Rock's Ireland website www.northernrock-ireland.ie.

^*AER stands for Annual Equivalent Rate and shows what the interest rate would be if interest was paid and added to the capital balance each year.

MORE INFORMATION AT NORTHERN ROCK'S IRELAND WEBSITE.

www.northernrock-ireland.ie

Notes to Editors

Northern Rock plc is a new bank, authorised by the FSA as a deposit taker and mortgage lender from 1 January 2010. It holds and services around £19bn of savings balances and £10bn of mortgage accounts. It offers new savings and mortgage products.

Northern Rock opened an office in Dublin in November 1999, initially offering a variable rate demand account, Direct Saver, for personal customers. Since then, other competitive personal and business savings products have been added to the range, and Northern Rock Ireland (now part of Northern Rock plc) now offers a number of accounts for individuals, businesses and credit unions. Personal customers can now invest in accounts such as Demand Online, an internet-based account, and Direct Silver Savings, an account available exclusively for the over 50s.

Media Contacts

• The UK Government has concluded that Northern Rock plc's strong capital and funding position means its retail savings guarantee can be released, following the relevant notice period
• Existing fixed term accounts will retain the guarantee for the remaining term of the product
• Existing variable rate accounts will retain the guarantee for a further three months - until 24 May 2010
• Going forward, Northern Rock Ireland savers will continue to be covered by a combination of the UK's Financial Services Compensation Scheme (FSCS) which provides protection up to £50,000 per person and the Irish Deposit Guarantee Scheme, which covers up to €100,000 per person

Northern Rock plc (the "Company") confirms that the UK Government, in consultation with the UK's Financial Services Authority (FSA), has completed a review of the retail savings guarantee put in place in September 2007, and has concluded that the guarantee can be released subject to the relevant notice period for customers (see below). This reflects Northern Rock's good progress and the Company's strong capital and liquidity position. It also ensures that the Company can compete on the same terms as other banks and building societies.

What does this mean for customers?

• There is no immediate change to the savings guarantee for existing accounts
• For customers with existing fixed term savings accounts, the guarantee will remain for the full term of the product
• For customers with existing variable rate accounts, the guarantee will remain for a further three months – until 24 May 2010
• Following the release of the guarantee, customers will continue to be covered by a combination of the FSCS, which provides protection up to £50,000 per person and the Deposit Guarantee Scheme, which currently covers up to €100,000 per person (€200,000 for joint accounts)
• Any new accounts will be covered by the FSCS and the Deposit Guarantee Scheme
• The Company, which remains UK Government owned, has written to its savings customers to make them aware of the changes and inform them of when the guarantee will be lifted

Gary Hoffman, Chief Executive said:

"We welcome the UK Government's decision to release the savings guarantee, following an appropriate period of notice for our customers. The guarantee remains in place until 24 May 2010 for customers with variable rate accounts and fixed rate accounts are guaranteed until the end of the term.

"This is another positive step in the right direction and the decision reflects our good progress and the strong capital position of Northern Rock.

Media Contacts

Notes to Editors

Northern Rock opened an office in Dublin in November 1999, initially offering a variable rate demand account, Direct Saver, for personal customers. Since then, other competitive personal and business savings products have been added to the range.

On 1 January 2010 the legal and capital restructure of the Northern Rock business was successfully completed, creating two separate companies:

• Northern Rock plc: a new savings and mortgage bank that holds and services all customer savings accounts and a small number of mortgages. The new bank is regulated as a deposit taker and mortgage lender by the FSA. It offers new savings products and new mortgage lending. Northern Rock plc also holds certain wholesale deposits. All Northern Rock Ireland accounts moved to Northern Rock plc at the time of the restructure.
• Northern Rock (Asset Management) plc: the existing company (renamed) which holds and services the majority of the existing residential mortgage book and is regulated by the FSA as a mortgage provider, not a deposit taking bank.
• The UK's Financial Services Compensation Scheme (FSCS) provides cover of up to £50,000 per person in each FSA regulated bank or building society. This means for a joint account held by two eligible depositors, the maximum amount that could be claimed would be £50,000 each, making a total of £100,000. Further detail on the scheme and the level of cover provided is available at www.fscs.org.uk.
• The Deposit Guarantee Scheme provides additional cover for savers. The total protection available to eligible savers, under both the FSCS and the Deposit Guarantee Scheme, is up to €100,000 per person. Further detail on the Deposit Guarantee Scheme is available at www.itsyourmoney.ie.

Important Notice

This document contains certain forward-looking statements with respect to the plans and objectives of Northern Rock, its current goals and expectations relating to its future financial condition and performance and the future operations of its business.

Forward-looking statements are sometimes, but not always, identified by the use of a date in the future or by such words as "anticipates", "aims", "due", "could", "may", "should", "expects", "believes", "intends", "plans", "potential", "reasonably possible", "targets", "goal" or "estimates" (although their absence does not mean that a statement is not forward looking). By their nature, forward-looking statements are unpredictable and involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Northern Rock's actual future results or developments may differ materially from the results and developments expressed or implied in these forward-looking statements as a result of a variety of factors, including (but not limited to) UK domestic and global economic and business conditions, market related risks such as interest rate and exchange rate volatility, delays in implementing proposals, difficulties with computer systems, legislative, fiscal, competition and regulatory developments and changes, the impact of any legal or other proceedings against Northern Rock, changes in customer preferences and other factors.

All forward-looking statements in this announcement are based on information available to Northern Rock as of the date hereof. All written or oral forward-looking statements attributable to Northern Rock or any person acting on behalf of Northern Rock are expressly qualified in their entirety by the foregoing.

Other than in accordance with its legal or regulatory obligations, neither Northern Rock nor anyone acting on its behalf undertakes any obligation to update or revise any forward looking statement, whether as a result of new information, future events or otherwise.

• Rate fixed at 2.75% gross per annum until 15 March 2011

Northern Rock Ireland has launched a new issue of its Direct Saver Fixed Rate Bond offering a fixed rate of 2.75% gross per annum (2.50% gross monthly) fixed until 15 March 2011.

Direct Saver Fixed Rate Bond Issue 23 offers a guaranteed return on balances from €1,000. This strictly limited issue Bond will be withdrawn without notice once fully subscribed.

Additional deposits (minimum €1,000) can be made during the offer period up to the maximum limit of €3 million per account holder. Should the need arise funds can be withdrawn during the fixed rate period. A charge equivalent to 60 days' gross interest on the amount withdrawn will apply.

Interest can be paid annually on 15 March, or monthly, on the last day of the month (available first business day of the following month).

Information packs can be obtained by telephoning 1 850 315 115.

Further product details and application forms are also available on Northern Rock's website www.northernrock-ireland.ie.

^*AER stands for Annual Equivalent Rate and shows what the interest rate would be if interest was paid and added to the capital balance each year.

MORE INFORMATION ON NORTHERN ROCK'S IRELAND WEBSITE.

www.northernrock-ireland.ie

• Rate fixed at 2.75% gross per annum until 15 January 2011

Northern Rock Ireland has launched a new issue of its Direct Saver Fixed Rate Bond offering a fixed rate of 2.75% gross per annum (2.50% gross monthly) fixed until 15 January 2011.

Direct Saver Fixed Rate Bond Issue 22 offers a guaranteed return on balances from €1,000. This strictly limited issue Bond will be withdrawn without notice once fully subscribed.

Additional deposits (minimum €1,000) can be made during the offer period up to the maximum limit of €3 million per account holder. Should the need arise, funds can be withdrawn during the fixed rate period. A charge equivalent to 60 days' gross interest on the amount withdrawn will apply.

Interest can be paid annually on 15 January, or monthly, on the last day of the month (available first business day of the following month).

Information packs can be obtained by telephoning 1 850 315 115.

Further product details and application forms are also available on Northern Rock's website www.northernrock-ireland.ie.

^*AER stands for Annual Equivalent Rate and shows what the interest rate would be if interest was paid and added to the capital balance each year.

MORE INFORMATION ON NORTHERN ROCK'S IRELAND WEBSITE.

www.northernrock-ireland.ie

• Rate fixed at 3.25% gross per annum until 15 November 2010

Northern Rock Ireland has launched a new issue of its Direct Saver Fixed Rate Bond offering a fixed rate of 3.25% gross per annum (3.00% gross monthly) fixed until 15 November 2010.

Direct Saver Fixed Rate Bond Issue 21 offers a guaranteed return on balances from €1,000. This strictly limited issue Bond will be withdrawn without notice once fully subscribed.

Additional deposits (minimum €1,000) can be made during the offer period up to the maximum limit of €3 million per account holder. Should the need arise, funds can be withdrawn during the fixed rate period. A charge equivalent to 60 days' gross interest on the amount withdrawn will apply.

Interest can be paid annually on 15 November, or monthly, on the last day of the month (available first business day of the following month).

Information packs can be obtained by telephoning 1 850 315 115.

Further product details and application forms are also available on Northern Rock's website www.northernrock-ireland.ie.

^*AER stands for Annual Equivalent Rate and shows what the interest rate would be if interest was paid and added to the capital balance each year.

MORE INFORMATION ON NORTHERN ROCK'S IRELAND WEBSITE.

www.northernrock-ireland.ie

• Rate fixed at 3.50% gross per annum until 15 September 2010

Northern Rock Ireland has launched a new issue of its Direct Saver Fixed Rate Bond offering a fixed rate of 3.50% gross per annum (3.25% gross monthly) fixed until 15 September 2010.

Direct Saver Fixed Rate Bond Issue 20 offers a guaranteed return on balances from €1,000. This strictly limited issue Bond will be withdrawn without notice once fully subscribed.

Additional deposits (minimum €1,000) can be made during the offer period up to the maximum limit of €3 million per account holder. Should the need arise, funds can be withdrawn during the fixed rate period. A charge equivalent to 60 days' gross interest on the amount withdrawn will apply.

Interest can be paid annually on 15 September, or monthly, on the last day of the month (available first business day of the following month).

Information packs can be obtained by telephoning 1 850 315 115.

Further product details and application forms are also available on Northern Rock's website www.northernrock-ireland.ie.

^*AER stands for Annual Equivalent Rate and shows what the interest rate would be if interest was paid and added to the capital balance each year.

MORE INFORMATION ON NORTHERN ROCK'S IRELAND WEBSITE.

www.northernrock-ireland.ie

• Rate fixed at 3.50% gross per annum until 15 July 2010

Northern Rock Ireland has launched a new issue of its Direct Saver Fixed Rate Bond offering a fixed rate of 3.50% gross per annum (3.25% gross monthly) fixed until 15 July 2010.

Direct Saver Fixed Rate Bond Issue 19 offers a guaranteed return on balances from €1,000. This strictly limited issue Bond will be withdrawn without notice once fully subscribed.

Additional deposits (minimum €1,000) can be made during the offer period up to the maximum limit of €3 million per account holder. Should the need arise, funds can be withdrawn during the fixed rate period. A charge equivalent to 60 days' gross interest on the amount withdrawn will apply.

Interest can be paid annually on 15 July, or monthly, on the last day of the month (available first business day of the following month).

Information packs can be obtained by telephoning 1 850 315 115.

Further product details and application forms are also available on Northern Rock's website www.northernrock-ireland.ie.

^*AER stands for Annual Equivalent Rate and shows what the interest rate would be if interest was paid and added to the capital balance each year.

MORE INFORMATION ON NORTHERN ROCK'S IRELAND WEBSITE.

www.northernrock-ireland.ie

• Rate fixed at 3.50% gross per annum until 15 May 2010

Northern Rock Ireland has launched a new issue of its Direct Saver Fixed Rate Bond offering a fixed rate of 3.50% gross per annum (3.25% gross monthly) fixed until 15 May 2010.

Direct Saver Fixed Rate Bond Issue 18 offers a guaranteed return on balances from €1,000. This strictly limited issue Bond will be withdrawn without notice once fully subscribed.

Additional deposits (minimum €1,000) can be made during the offer period up to the maximum limit of €3 million per account holder. Should the need arise, funds can be withdrawn during the fixed rate period. A charge equivalent to 60 days' gross interest on the amount withdrawn will apply.

Interest can be paid annually on 15 May, or monthly, on the last day of the month (available first working day of the following month).

Information packs can be obtained by telephoning 1 850 315 115.

Further product details and application forms are also available on Northern Rock's website www.northernrock-ireland.ie.

^*AER stands for Annual Equivalent Rate and shows what the interest rate would be if interest was paid and added to the capital balance each year.

MORE INFORMATION ON NORTHERN ROCK'S IRELAND WEBSITE.

www.northernrock-ireland.ie

• Rate fixed at 5.00% gross per annum until 15 December 2009

Northern Rock Ireland has launched a new issue of its Direct Saver Fixed Rate Bond offering a fixed rate of 5.00% gross per annum (4.75% gross monthly) fixed until 15 December 2009.

Direct Saver Fixed Rate Bond Issue 17 offers a guaranteed return on balances from €1,000. This strictly limited issue Bond will be withdrawn without notice once fully subscribed.

Additional deposits (minimum €1,000) can be made during the offer period up to the maximum limit of €3 million per account holder. Should the need arise, funds can be withdrawn during the fixed rate period. A charge equivalent to 60 days' gross interest on the amount withdrawn will apply.

Interest can be paid annually on 15 December, or monthly, on the last day of the month (available first working day of the following month).

Information packs can be obtained by telephoning 1 850 315 115.

Further product details and application forms are also available on Northern Rock's website www.northernrock-ireland.ie.

^*AER stands for Annual Equivalent Rate and shows what the interest rate would be if interest was paid and added to the capital balance each year.

MORE INFORMATION ON NORTHERN ROCK'S IRELAND WEBSITE.

www.northernrock-ireland.ie

• Rate fixed at 5.20% gross per annum until 15 October 2009

Northern Rock Ireland has launched a new issue of its Direct Saver Fixed Rate Bond offering a fixed rate of 5.20% gross per annum (4.95% gross monthly) fixed until 15 October 2009.

Direct Saver Fixed Rate Bond Issue 16 offers a guaranteed return on balances from €1,000. This strictly limited issue Bond will be withdrawn without notice once fully subscribed.

Additional deposits (minimum €1,000) can be made during the offer period up to the maximum limit of €3 million per account holder. Should the need arise, funds can be withdrawn during the fixed rate period. A charge equivalent to 60 days' gross interest on the amount withdrawn will apply.

Interest can be paid annually on 15 October, or monthly, on the last day of the month (available first working day of the following month).

Information packs can be obtained by telephoning 1 850 315 115.

Further product details and application forms are also available on Northern Rock's website www.northernrock-ireland.ie.

^*AER stands for Annual Equivalent Rate and shows what the interest rate would be if interest was paid and added to the capital balance each year.

MORE INFORMATION ON NORTHERN ROCK'S IRELAND WEBSITE.

www.northernrock-ireland.ie

• Variable rates to increase by up to 0.25%

Following yesterday's announcement by the European Central Bank (ECB) of an increase in its main refinancing rate or "repo" rate to 4.25%, Northern Rock will be writing to customers with variable rate accounts to inform them of an increase in their rates.

Several accounts, including Direct Silver Savings, increased from yesterday, 3 July 2007.

Northern Rock also offers one year Fixed Rate Bond at 5.05%.

Customer Helpline

For information packs on Northern Rock's personal and business deposit accounts, customers can telephone 1850 315 115

MORE INFORMATION ON NORTHERN ROCK'S IRELAND WEBSITE www.northernrock-ireland.ie.

Northern Rock opened an office in Dublin in November 1999, initially offering a variable rate demand account, Direct Saver, for personal customers. Since then, other savings products have been added to the range.

Northern Rock's current savings range includes:

Demand Online - at 5.00% gross per annum the annual variable interest rate is currently 0.75% higher than the European Central Bank (ECB) Base Rate and is guaranteed to be no lower than the ECB Base Rate until 1 January 2008. The account is opened and operated online with a minimum opening balance of €1,000.

Direct Saver Fixed Rate Bond Issue 15 - with an annual rate of 5.05% gross per annum fixed until maturity on 17 August 2009. The account is opened and operated by post with a minimum opening balance of €1,000. The Bond is a strictly limited issue and can be withdrawn at any time.

Direct Silver Savings - at 4.20% gross monthly interest / 4.28% CAR the monthly variable rate is guaranteed to be no lower than the ECB Base Rate until 1 January 2010. The account is available exclusively to savers aged 50 or over. The account can be opened by post with a minimum opening balance of €20,000 and operated by post and telephone.

Direct Saver 60 - at 4.05% gross per annum the variable rate is guaranteed to be no lower than 0.20% below ECB Base Rate until further notice.

Direct Saver 30 - at 3.90% gross per annum the annual rate is guaranteed to be no lower than 0.35% below ECB Base Rate until further notice.

Direct Saver Demand - at 3.75% gross per annum the variable rate is guaranteed to be no lower than 0.50% below the ECB Base Rate until further notice.

Direct Business Reserve - at 4.30% gross per annum / 4.38% CAR the variable rate is guaranteed to be no lower than 0.25% below the ECB Base Rate until 1 January 2010.

Account information packs can be obtained by telephoning 1 850 315 115

• Rate fixed at 5.05% gross per annum until 17 August 2009

Northern Rock Ireland has launched a new issue of its Direct Saver Fixed Rate Bond offering a fixed rate of 5.05% gross per annum (4.80% gross monthly) fixed until 17 August 2009.

Direct Saver Fixed Rate Bond Issue 15 offers a guaranteed return on balances from €1,000. This strictly limited issue Bond will be withdrawn without notice once fully subscribed.

Additional deposits (minimum €1,000) can be made during the offer period up to the maximum limit of €3 million per account holder. Should the need arise, funds can be withdrawn during the fixed rate period. A charge equivalent to 60 days' gross interest on the amount withdrawn will apply.

Interest can be paid annually on 17 August, or monthly, on the last day of the month (available first working day of the following month).

Information packs can be obtained by telephoning 1 850 315 115.
Further product details and application forms are also available on Northern Rock's website

www.northernrock-ireland.ie.

^*AER stands for Annual Equivalent Rate and shows what the interest rate would be if interest was paid and added to the capital balance each year.

MORE INFORMATION ON NORTHERN ROCK'S IRELAND WEBSITE.

www.northernrock-ireland.ie

• Rate fixed at 4.99% gross per annum until 15 June 2009

Northern Rock Ireland has launched a new issue of its Direct Saver Fixed Rate Bond offering a fixed rate of 4.99% gross per annum (4.74% gross monthly) fixed until 15 June 2009.

Direct Saver Fixed Rate Bond Issue 14 offers a guaranteed return on balances from €1,000. This strictly limited issue Bond will be withdrawn without notice once fully subscribed.

Additional deposits (minimum €1,000) can be made during the offer period up to the maximum limit of €3 million per account holder. Should the need arise, funds can be withdrawn during the fixed rate period. A charge equivalent to 60 days' gross interest on the amount withdrawn will apply.

Interest can be paid annually on 15 June, or monthly, on the last day of the month (available first working day of the following month).

Information packs can be obtained by telephoning 1 850 315 115.
Further product details and application forms are also available on Northern Rock's website

www.northernrock-ireland.ie.

CAR stands for the Compounded Annual Rate and shows the annual rate of return on the investment if interest payments are retained in the account.

• Demand Online rate to increase to 5.00% gross p.a.
• HM Treasury Guarantee remains in place

Northern Rock is significantly enhancing its competitive savings range by increasing the rate on its Internet based demand account, Demand Online.

Northern Rock's Internet account, Demand Online, will increase by 0.50% to a market leading 5.00% gross p.a on balances from €1,000 from today (1 February 2008).

Demand Online's annual interest rate is guaranteed to be no lower than ECB Base Rate (currently 4.00%) until 1 January 2009.

Demand Online offers customers the convenience of operating their account through the Internet and it also offers customers the flexibility to make deposits and withdrawals by cheque.

HM Treasury Guarantee

On 9 October 2007, HM Treasury confirmed that the guarantee arrangements announced to protect existing depositors of Northern Rock were extended to cover all new and existing retail deposits. The Guarantee also covers all new deposits, all further interest payments and movement of funds between accounts and all term deposits, including Fixed Rate Bonds, for the duration of their term.

These guarantee arrangements continue to remain in place during the current instability in the financial markets.

Northern Rock Savings Pledge

Northern Rock's Savings Pledge continues to ensure that its savers are kept fully informed of any changes to their accounts. Northern Rock writes to its savers every time it changes the interest rate on their account. In addition, if the account is a notice account and rates are to be reduced, the advance notice will be at least the same as the notice period.

Customer Helpline

For information packs on Northern Rock's personal and business deposit accounts, customers can telephone 1 850 315 115

Following receipt of indicative expressions of interest covering a range of options in respect of its business, the Company and its advisors have engaged in discussions with a limited number of selected interested parties to clarify their proposals. As a result, and following discussions with the Tripartite Authorities (the Bank of England, HM Treasury and the Financial Services Authority), the Board has concluded that it wishes to take forward discussions on an accelerated basis with a consortium comprising Virgin Group, WL Ross & Co, Toscafund Asset Management LLP and First Eastern Investment Group (the “Virgin Consortium”).

Bryan Sanderson, Chairman of Northern Rock, said

"This is very good news for Northern Rock. Over the last few weeks and months we have looked at the issues from the perspective of all stakeholders. I am grateful for the support that we have had from customers and employees who have stayed loyal to us during these difficult times – and pleased that a solution that firmly restores the Company's prospects has been identified. Furthermore our retail depositors can be fully reassured that the Government has said it will ensure savers' money is safe whatever the outcome."

The Virgin Consortium Proposal

The Virgin Consortium is continuing its discussions with the Company and the Tripartite Authorities and is working on finalising its proposal as soon as possible. This is subject to all necessary regulatory approvals being obtained. Under the Virgin Consortium's indicative proposal, £11 billion will be repaid to the Bank of England at completion of the transaction – and the Bank of England will have a clear path towards repayment in full. The Virgin Consortium also proposes that all interest accruing to the Company's financing sources, including under the Bank of England facilities, will be paid in cash rather than rolled-up for payment in due course. Under the Virgin Consortium proposal, additional substantial funding facilities are also to be put in place to ensure appropriate financial flexibility for the Company going forward.

The Virgin Consortium's indicative proposal is as follows:

• £1.3 billion of new cash and the Virgin Money business will be injected into Northern Rock for an issue of new ordinary shares in each case. The implied value of Virgin Money is £250m.
• Of the cash amount:
  • half will be provided by the Virgin Consortium and
  • half will be raised through an offer to existing holders on the relevant record date of new ordinary shares in Northern Rock on a pro rata basis at a price of 25 pence per new ordinary share (the “Offering”). The Virgin Consortium will arrange for the Offering to be fully underwritten.
• The injection of Virgin Money will take place on the same pricing basis as the Offering and, if the Offering is fully taken up by existing shareholders, the Virgin Consortium will hold no more than 55% of the Company once the transaction has been concluded.

The Virgin Consortium intends that Northern Rock will be re-branded Virgin, its stock market listing will be retained (subject to the eligibility criteria contained in the Listing Rules) and the Company will continue as a going concern without any break-up of the business. The Virgin Consortium has informed the Board that it has no current intention of making any material reduction in employment in Northern Rock and intends to continue to operate the business from Newcastle upon Tyne and in the North-East of England. The Virgin Consortium expects that the Company will quickly re-build a deposit base to drive a more sustainable funding structure and is targeting a credit rating of no less than ‘A'.

The Virgin Consortium intends that the Northern Rock Foundation will continue to participate in the profits of the Company. In addition, in recognition of the contribution of HM Treasury and the Bank of England to the restructuring of Northern Rock, the Virgin Consortium will make an additional profit participation payment to the Northern Rock Foundation of £10m in each of the financial years up to 2015 that the Company's pre-tax profits exceed £638m (being the aggregate of the pre-tax profits of the Company and Virgin Money for the financial year 2006), for a maximum of five financial years.

The Virgin Consortium intends to capitalise on the strength of the Virgin brand, the introduction of additional management and experience from the current Virgin Money business, and the funding and liquidity solutions to be delivered by the Virgin Consortium partners to rebuild the Company's franchise on stronger foundations. The Virgin Consortium believes that together with the Company it can bring the business a renewed confident future for the benefit of all of the Company's current stakeholders.

Under the Virgin Consortium proposal a new management team will be put in place to take the Company forward, led by Sir Brian Pitman (formerly Chairman and CEO of Lloyds TSB Group plc) as Chairman and Jayne-Anne Gadhia as CEO, and supported by Sir George Mathewson (formerly Chairman of The Royal Bank of Scotland plc) as senior adviser.

About Virgin Money

Virgin Money Holdings UK Limited and its subsidiaries ("Virgin Money") have rights to use the Virgin brand in retail financial services in the United Kingdom. Virgin Money, based in Norwich - East Anglia was established in 1995 (as Virgin Direct, as it was then known) and has grown to become an established retail financial services enterprise, with over £2.5bn of funds under management, circa 1.9 million credit card customers via its affinity arrangement with Bank of America, the provision of general insurance products in conjunction with UK Insurance (a division of The Royal Bank of Scotland plc) and the provision of life and cancer cover in partnership with Scottish Widows.

Virgin Money's consolidated gross assets as at 31 December 2006 per its statutory accounts were £34.9 million. Virgin Money's consolidated profit before tax for the year ended 31 December 2006 per its statutory accounts was £10.2 million. Virgin Money has continued to grow very strongly during 2007.

It is proposed that Jayne-Anne Gadhia, the current Chief Executive Officer of Virgin Money, be appointed an executive director of the Company. The service contract for Mrs Gadhia in the proposed role will be finalised in due course.

Treasury Guarantee

HM Treasury has confirmed that the guarantee arrangements for depositors in Northern Rock cover all retail deposits, including future interest payments, movements of funds between accounts and term deposits for the duration of the term. If the Company's strategic review does not lead to a corporate transaction, HM Treasury will maintain these guarantee arrangements until it is satisfied that the current financial market instability is over and the position of depositors is protected. In the event of a corporate transaction, the Tripartite Authorities would satisfy themselves that the business was financially secure and depositors were protected. In any event, the guarantee arrangements will not be brought to an end without reasonable notice.

Approach of the Tripartite Authorities

On 19 November 2007 the Tripartite Authorities issued a statement of principles which set out how they expect to approach proposals for the future of Northern Rock and its business, in particular considering the objectives against which the Tripartite Authorities expect to assess proposals received by Northern Rock. The Tripartite Authorities have confirmed to the Company that those principles, and the objectives which they have previously announced, continue to apply.

In reaching agreement with Northern Rock that discussions about its proposal should go forward on an accelerated basis, the Virgin Consortium has at the same time confirmed to HM Treasury and the Bank of England that any transaction will be predicated on the following principles:

• its equity and debt financing proposals will, at the point of announcement of a definitive transaction, be fully underwritten;
• as included in the Virgin Consortium's proposal, the private sector debt financing must be comparable in scale to any public sector debt financing required following closing;
• the public sector debt financing required must be on comparable terms, including as to ranking in time of repayment and point of priority, as the private sector debt financing envisaged by the proposal;
• there must be binding incentives for the delivery of the Virgin Consortium's plan for achieving appropriate credit ratings, bringing to an end any public sector guarantee arrangements, repaying the public sector financing and terminating any other public sector commitments; and
• returns on equity investments made by members of the Virgin Consortium and other holders of ordinary shares must be restricted until the public sector loans have been paid back with interest and all other public sector commitments are at an end.

It should be noted that in addition to these requirements, the regulatory requirements of the Financial Services Authority (including as to business plan and control of Northern Rock) must be met and EC state aid requirements complied with.

Other aspects

The Board is also continuing to explore other options as part of its strategic review. Northern Rock reminds all stakeholders that there can be no certainty that the discussions with the Virgin Consortium will lead to a transaction in relation to the Company or all or any part of its business.

The Company has agreed to cover certain out-of-pocket expenses, not exceeding £5 million (plus applicable VAT), in connection with the indicative proposal, including meeting the professional advisory costs of the financing banks on the basis that the Company expects to be able to make use of such finance whether or not the transaction proceeds.

Extraordinary General Meeting

On Friday 23 November 2007, the Board received a notice from certain shareholders in the Company claiming to hold not less than one-tenth of the fully paid up voting share capital of the Company requiring the Directors of the Company pursuant to section 303 of the Companies Act 2006 to convene an extraordinary general meeting to consider and if thought fit to pass a special resolution requiring shareholder approval for a disposal in any 12 month period of more than 5 per cent of the aggregate book value of the Company's assets. Whilst it does not consider such action to be warranted or appropriate, particularly at a time when the Company is actively engaged in its strategic review, the Board is in the process of establishing that the requisition notice has been properly served and, if this is the case, will make the necessary arrangements to convene such a meeting within the required timetable to consider the proposed resolution. The Board will give its view on the merits of the proposal at the time the notice of meeting is sent to shareholders.

Important Notice

The Blackstone Group International Limited (“Blackstone”), Citigroup Global Markets Limited ("Citi") and Merrill Lynch International, which are authorised and regulated in the United Kingdom by the Financial Services Authority, are acting exclusively for Northern Rock plc and no-one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than Northern Rock plc for providing the protections afforded to clients of Blackstone, Citi or Merrill Lynch International nor for providing advice in relation to the matters referred to in this announcement.

Not for release, publication or distribution in or into any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction.

There has been considerable speculation in the media over recent days regarding the possibility of a transaction with another party. Northern Rock is not in discussion with any other party at the present time, however the Board is aware of its fiduciary duty and is actively considering all strategic options in the interests of shareholders, customers and other stakeholders.

The Chancellor's statement makes it clear beyond any doubt that all savings in Northern Rock are safe and secure. Consequently anybody who is in a queue outside a branch, or who is trying to access an online account can be fully reassured that there is no cause for concern whatsoever.

Any customer who paid a penalty to withdraw their funds from Northern Rock, due to concern over the current situation, will have the penalty refunded if they reinvest those funds in the same type of account with Northern Rock by 5 October 2007.

• Rate fixed at 4.75% gross per annum until 15 October 2008

Northern Rock Ireland has launched a new issue of its Direct Saver Fixed Rate Bond offering a market leading fixed rate of 4.75% gross per annum (4.50% gross monthly) fixed until 15 October 2008.

Direct Saver Fixed Rate Bond Issue 12 offers a guaranteed return on balances from €1,000. This strictly limited issue Bond will be withdrawn without notice once fully subscribed.

Additional deposits (minimum €1,000) can be made during the offer period up to the maximum limit of €3 million per account holder. Should the need arise, funds can be withdrawn during the fixed rate period. A charge equivalent to 60 days' gross interest on the amount withdrawn will apply.

Interest can be paid annually on 15 October, or monthly, on the last day of the month (available first working day of the following month).

Information packs can be obtained by telephoning 1 850 315 115. Further product details and application forms are also available on Northern Rock's website www.northernrock-ireland.ie.

Northern Rock Commercial Director Andy Kuipers said: "Through its mix of competitive variable and fixed rate products, Northern Rock Ireland has earned a reputation for market-leading savings accounts, including our variable rate Demand Online paying 4.50% gross p.a./CAR. Investors have responded well to our offering and our deposit balances now exceed €2 billion.

This limited issue bond is ideal for savers prepared to invest their money at a market-leading rate, guaranteed for a fixed period. Applications will be accepted on a first come, first served basis."

CAR stands for the Compounded Annual Rate and shows the annual rate of return on the investment if interest payments are retained in the account.

Northern Rock reports further growth in new savings balances in Ireland. Balances grew by almost 6% in the first half of this year to €2,388m. Across all accounts, Irish savers deposited €131 million of net new funds with Northern Rock since December 2006. The growing popularity of online accounts in Ireland, supported by traditional postal accounts, helped continue the balance growth.

As Northern Rock started the UK banks reporting season by publishing its interim results for 2007, Commercial Director Andy Kuipers disclosed that more than half of its customers in Ireland now have an internet account. The number of online accounts increased by nearly 18% since the end of 2006 from just under 11,400 to more than 13,400.

Announcing the Group interim results for 2007, Chief Executive Adam Applegarth reported today that compared with the same time last year, underlying pre tax profits for the Group, based in Newcastle upon Tyne, were up by 26.6% to €514.7 million*. Over the same period, underlying assets increased by 28.3% to €167.8 billion*. Net lending increased by 47.3% to €15.9 billion* representing an estimated market share of UK net residential mortgage lending of 18.9%. Since the end of 2006, total retail savings balances for the group increased by €2.6 billion* to €36.2 billion*.

The cost to underlying asset ratio improved to 0.29% (from 0.31% at the end of 2006). The underlying cost to income ratio improved to 26.6% (from 28.4% at the end of 2006) as Northern Rock consolidated its position as one of the most cost efficient European banks.

Mr Applegarth announced a proposed interim dividend for 2007 of 14.2p - an increase of 30.3% over the 2006 interim dividend. "Operationally, Northern Rock has had a good first half in 2007," he said. "We are pleased to have achieved approval for use of our Basle II rating systems. This means that the benefits of Basle II enable us to increase our 2007 interim dividend by 30%. Going forward, our dividend payout rate increases to 50% from around 40%. Future capital planning, including the reduction of capital hungry assets, will allow us to return capital to shareholders through a share buyback programme."

Northern Rock Group preliminary results are available on

www.northernrock.com

*Exchange rate based on 1.4851 euro to 1 pound sterling

While the total amount in Northern Rock's Irish savings account balances increased by almost 6% since the year end, the average balance increased by 13% to €97,280. The number of accounts open at 30 June 2007 remained relatively steady at 24,548.

Northern Rock Commercial Director Andy Kuipers said: "We are delighted with the continuing success of our Dublin operation. Customers are continuing to take advantage of our transparent, competitive and easy to operate accounts.

"Demand Online and Fixed Rate Savings accounts both offer attractive rates, along with cast-iron guarantees. Our accounts also have the advantage of having no complicated caveats or conditions attached.

"Demand Online continues to be our most popular product with over 13,400 accounts. Balances continue to grow and recently passed €1.5 billion with the average balance being approximately €114,000. Our customers in Ireland have embraced online transactions, attracted by both the competitive rates and our straightforward approach to savings.

"During 2007, Northern Rock's performance has been enhanced by the continuation of our Fixed Rate Bond programme, which was re-launched in November 2006 and now has over 1,000 account holders. We remain confident that our current portfolio will continue to be attractive to a wide range of savers in Ireland."

Northern Rock opened an office in Dublin in November 1999, initially offering a variable rate demand account for personal customers, Direct Saver. Since then, other competitive savings products have been added to the range.

Northern Rock's current savings range includes:

Demand Online – at 4.50% gross per annum the annual variable interest rate is currently 0.50% higher than the European Central Bank (ECB) Base Rate and is guaranteed to be no lower than the ECB Base Rate until 1 January 2009. The account is opened and operated online with a minimum opening balance of €1,000.

Direct Saver Fixed Rate Bond Issue 11 – with an annual rate of 4.75% gross per annum fixed until maturity on 15 August 2008. The account is opened and operated by post with a minimum opening balance of €1,000. The Bond is a strictly limited issue and can be withdrawn at any time.

Direct Silver Savings - at 3.95% gross monthly interest / 4.02% CAR the monthly variable rate is guaranteed to be no lower than the ECB Base Rate until 1 January 2010. The account is available exclusively to savers aged 50 or over. The account can be opened by post with a minimum opening balance of €20,000 and operated by post and telephone.

Direct Saver 60 – at 3.80% gross per annum the variable rate is guaranteed to be no lower than 0.20% below ECB Base Rate until further notice.

Direct Saver 30 – at 3.65% gross per annum the annual rate is guaranteed to be no lower than 0.35% below ECB Base Rate until further notice.

Direct Saver Demand – at 3.50% gross per annum the variable rate is guaranteed to be no lower than 0.50% below the ECB Base Rate until further notice.

Direct Business Reserve - at 4.05% gross per annum / 4.12% CAR the variable rate is guaranteed to be no lower than 0.25% below the ECB Base Rate until 1 January 2010.

Account information packs can be obtained by telephoning 1 850 315 115

• Variable rates to increase by up to 0.25%
• Demand Online rate to increase to a market leading 4.50% gross p.a.
• Market leading one year Fixed Rate Bond launched at 4.75% gross p.a.

Following today's announcement by the European Central Bank (ECB) of an increase in its main refinancing rate or “repo” rate to 4.00%, Northern Rock will be writing to customers with variable rate accounts to inform them of an increase in their rates.

Northern Rock's Internet account, Demand Online, will increase by 0.20% to a market leading 4.50% gross p.a. from 6 July 2007. All other variable rate accounts will increase by between 0.15% and 0.25%.

Northern Rock will also launch a one year Fixed Rate Bond with effect from Friday 8 June. This will pay a highly competitive rate of 4.75% gross p.a. fixed until 15 August 2008. Fixed Rate Bond Issue 10 will be withdrawn on Wednesday 6 June.

In addition, Northern Rock also announces that the rate guarantee on its market leading Demand Online will be extended until 1 January 2009.

Commercial Director Andy Kuipers said: "This increase in rates will further enhance our market leading range of variable and fixed rate deposit products, providing a great home for lump sums and matured SSIA deposits."

• For information packs on Northern Rock's personal and business deposit accounts, customers can telephone 1850 315 115
• For more information online, click on 'home' button above

Additional Information

Northern Rock opened an office in Dublin in November 1999, initially offering a variable rate demand account, Direct Saver, for personal customers. Since then, other competitive savings products have been added to the range.

Northern Rock's current savings range includes:

Demand Online – at 4.50% gross per annum the annual variable interest rate is currently 0.50% higher than the European Central Bank (ECB) Base Rate and is guaranteed to be no lower than the ECB Base Rate until 1 January 2009. The account is opened and operated online with a minimum opening balance of €1,000.

Direct Saver Fixed Rate Bond Issue 11 – with an annual rate of 4.75% gross per annum fixed until maturity on 15 August 2008. The account is opened and operated by post with a minimum opening balance of €1,000. The Bond is a strictly limited issue and can be withdrawn at any time.

Direct Silver Savings - at 3.95% gross monthly interest / 4.02% CAR the monthly variable rate is guaranteed to be no lower than the ECB Base Rate until 1 January 2010. The account is available exclusively to savers aged 50 or over. The account can be opened by post with a minimum opening balance of €20,000 and operated by post and telephone.

Direct Saver 60 – at 3.80% gross per annum the variable rate is guaranteed to be no lower than 0.20% below ECB Base Rate until further notice.

Direct Saver 30 – at 3.65% gross per annum the annual rate is guaranteed to be no lower than 0.35% below ECB Base Rate until further notice.

Direct Saver Demand – at 3.50% gross per annum the variable rate is guaranteed to be no lower than 0.50% below the ECB Base Rate until further notice.

Direct Business Reserve - at 4.05% gross per annum / 4.12% CAR the variable rate is guaranteed to be no lower than 0.25% below the ECB Base Rate until 1 January 2010.

Account information packs can be obtained by telephoning 1 850 315 115

Rate fixed at 4.50% gross per annum until 15 July 2008.

Northern Rock Ireland has launched a new issue of its Direct Saver Fixed Rate Bond offering a market leading fixed rate of 4.50% gross per annum (4.25% gross monthly) fixed until 15 July 2008.

Direct Saver Fixed Rate Bond Issue 10 offers a guaranteed return on balances from €1,000. This strictly limited issue Bond will be withdrawn without notice once fully subscribed.

Additional deposits (minimum €1,000) can be made during the offer period up to the maximum limit of €3 million per account holder. Should the need arise, funds can be withdrawn during the fixed rate period. A charge equivalent to 60 days' gross interest on the amount withdrawn will apply.

Interest can be paid annually on 15 July, or monthly, on the last day of the month (available first working day of the following month).

Information packs can be obtained by telephoning 1850 315 115.

Further product details and application forms are also available at direct saver fixed rate bond.

Northern Rock Commercial Director Andy Kuipers said: “Through its mix of competitive variable and fixed rate products, Northern Rock Ireland has earned a reputation for market-leading savings accounts, including our variable rate Demand Online paying 4.30% gross p.a./CAR. Investors have responded well to our offering and our deposit balances now exceed €2 billion.

This limited issue bond is ideal for savers prepared to invest their money at a market-leading rate, guaranteed for a fixed period. Applications will be accepted on a first come, first served basis.”

CAR stands for the Compounded Annual Rate and shows the annual rate of return on the investment if interest payments are retained in the account.