Northern Rock Competitive Framework

Overview

Northern Rock is determined to return to private ownership as rapidly as possible, as a viable, competitive bank, requiring no support from Government.

We are aware that during the period of temporary public ownership, Government support could enable us to compete, or be seen to compete, on an unfair basis.

We are determined to ensure that we will not take unfair advantage of Government support during this interim period as it is not in our long term interests to do so.

We are committing to this framework of principles and commitments while in receipt of State aid. These will be kept under review and remain subject to the requirements of the European Commission.

Our Principles

• We will not promote our Government guarantee arrangements in any market.
• We will not sustain a prolonged presence as a market leader in the marketplace or in any product category.
• We will maintain market shares below historical levels while in receipt of State aid.
• We will strive to differentiate ourselves on the basis of service and innovation.
• We will at all times treat our customers fairly.
• We will regularly review our competitive offering and performance to ensure adherence to the framework.

Our Commitments

• We will not explicitly refer to Government ownership in marketing literature.
• We will not allow our share of retail deposit balances to exceed 1.5% in the UK and 0.8% in Ireland (well below our historic levels of 1.9% in the UK and 1.3% in Ireland).
• We will limit our share of gross new mortgage origination to no more than 2.5% in any calendar year.
• We will not rank within the top 3 in any one of the defined 15 Moneyfacts retail deposit categories for the remainder of 2008.