IRISH customers of troubled UK bank Northern Rock were assured last night that their savings were safe, after the British Treasury said it was taking temporary ownership of the bank.

Last year, the Newcastle-based bank ran into financial difficulties because of the global "credit crunch" and was forced to ask the Bank of England for emergency funds.

This triggered the first run on a British bank in more than a century and also led to long queues outside its Dublin office as nervous customers waited in line to find out whether their deposits were safe.

At the time of its difficulties, Northern rock's online bank in Ireland had an estimated €2.5bn and 24,000 depositors.

On its website yesterday, the bank said it was business as usual and that customers were not affected by the temporary public ownership change.

"Your savings with Northern Rock continue to be safe and secure, protected by government (UK) guarantee arrangements," it said.

The bank also assured customers that the terms and conditions of their mortgages, savings and other products remained unchanged.

A spokesperson for the (Irish) Financial Regulator said it had been informed of the move by the British authorities and understood that guarantees on savings remained in place.

A consortium led by Sir Richard Branson's Virgin Group and a rival in-house management team both tabled offers for the lender.

However, announcing the temporary public ownership move, UK Chancellor Alistair Darling said that "under current market conditions" neither of the proposals delivered "sufficient value for money to the taxpayer".

Taxpayers

"Our financial adviser Goldman Sachs has concluded from a financial point of view that a temporary period of public ownership better meets our objective of protecting taxpayers," he said.

In a lengthy statement, Mr Darling also assured customers that savers' and depositors' money in the bank remained safe and secure and that the government guarantee arrangements remained in place and would continue to do so.

The public ownership move would allow for the running of the bank and for its eventual transfer back into the private sector "as soon as it is right to do so", he said.

"Northern Rock will continue operating as a bank on a commercial basis. It will be open for business as usual tomorrow morning and thereafter," he said yesterday.

"It is our expectation that the company can be moved into the private sector at the earliest and most prudent opportunity," said the chancellor.

He described the temporary move into public ownership as the "most effective way of continuing to support Northern Rock's business, its savers, the wider financial system and safeguard taxpayers' money".

Shares in the bank have been suspended until today when legislation will be pushed through the British parliament enabling the government to acquire the bank's shares and assets.

UK taxpayers are now subsidising the bank in loans and guarantees to other lenders to the tune of about stg£55bn (€73bn).

The UK Treasury had already recruited the former boss of the Lloyd's of London insurance market, Ron Sandler, to lead Northern Rock in case the bank was nationalised. Mr Sandler is expected at the bank's headquarters today to discuss the business and meet staff and their representatives.

News of the move did not, however, receive universal approval. Robin Ashby from Northern Rock Small Shareholders group -- based in Newcastle -- said he was shocked and appalled at the move by the British government.

He attacked the decision to take over the bank and said it was part of the long process of mismanagement of the whole Northern Rock saga.

Source:-http://www.independent.ie/national-news/irish-told-cash-is-safe-as-northern-is-nationalised-1291784.html