On Wednesday, the U.K. Treasury announced plans to end its guarantees for Northern Rock plc’s retail deposits, starting at the close of business on May 24, 2010. The timing of the change corresponds to the three-month notice period that Treasury agreed to provide before removing the guarantees. Going forward, retail customers at Northern Rock “will continue to have the first £50,000 of their total deposit protected by the Financial Services Compensation Scheme … the same level of protection that is provided for retail customers of all banks and building societies in the UK.”

In announcing the end of the guarantees, both Treasury and Northern Rock referenced the company’s improved financial position. According to Gary Hoffman, Chief Executive of Northern Rock, “[t]his is another positive step in the right direction and the decision reflects our good progress and the strong capital position of Northern Rock.” Paul Myners, the Financial Services Secretary to the Treasury, also stated that “[t]oday’s announcement shows how far we have come. Depositors can have confidence in Northern Rock.”

Wednesday’s announcement followed Treasury’s recent restructuring of Northern Rock into two separate companies, Northern Rock plc and Northern Rock (Asset Management) plc. According to Treasury, “the termination of the guarantee arrangements in respect of Northern Rock plc [announced on Wednesday] does not affect any of the other guarantee arrangements announced on December 8, 2009 in respect of Northern Rock plc or Northern Rock (Asset Management) plc.”