Morgan Stanley’s hopes of securing a plum job advising both Northern Rock and the body that oversees the Government’s stakes in banks about the nationalised lender’s future appear to have suffered a setback.
Northern Rock and UK Financial Investments were close to signing an agreement with Morgan Stanley last week for a mandate that will be among the most high profile government assignments since the financial crisis. Northern Rock and UKFI are understood not to have made a final decision about which institution to pick, but it is understood that concerns have arisen about appointing the American investment bank. They are thought to concern the strict criteria set out by the Government on conflicts of interest.
Several banks talking to potential bidders for Northern Rock or for other banking assets that are up for sale ruled themselves out from pitching for Northern Rock’s advisory mandate for that reason.