Northern Rock 'can't find buyer'

Full special report on the global credit crunch See Northern Rock's shares

Stricken lender Northern Rock is continuing to struggle to attract a buyer, a report has claimed.

At least 12 of the UK and Europe's biggest banks have now decided not to buy the Newcastle-based lender, according to the Sunday Times.

The paper says banks have estimated that it would require too much capital - as much as £20bn - to successfully refinance Northern Rock.

No-one from Northern Rock was available for comment.

Global credit squeeze

Shares in the bank have lost nearly 75% of their value since it was forced to seek emergency funding from the Bank of England two weeks ago.

Northern Rock got itself into financial difficulty because unlike most UK banks, it raises the majority of its funds via the global wholesale credit market.

This market has dried up over the past month as a result of the crisis in the US sub-prime mortgage market, which has made banks and other investors a lot more unwilling to lend to each other.

Last week the government said it would guarantee all deposits held by Northern Rock, in an attempt to reinforce confidence in the firm.

However, some Northern Rock savers continued to queue outside some of the bank's branches to remove their funds.

A majority of analysts say the bank's future as an independent company is untenable, but a buyer has yet to come forward.

Banks said to have turned their backs on a potential bid for Northern Rock are HSBC, Royal Bank of Scotland, Barclays and Lloyds TSB.