Blackfriar: Yorkshire must fight to keep jobs after 'bad bank' merger

So Blackfriar didn't raise an eyebrow when shortly after the Chancellor had finished delivering his Budget, UK Financial Investments (UKFI) issued a statement confirming the creation of a giant bad bank.

UKFI, which holds the purse strings to the Government's numerous banking assets, said it is merging Bradford & Bingley's mortgage book with Northern Rock's more troublesome loans.

The merger has been on the cards ever since the Government nationalised the two ailing former building societies. And creating a single dumping ground for these toxic assets, which are worth almost 100bn, seems like the sensible thing to do.

Into the hole will go Northern Rock's notorious Together loans, which lent homeowners up to 125 per cent of the value of their property, plus the liar loans and buy-to-let mortgages that have sent arrears rocketing at B&B.

Last night, no one would say what this merger means for the 950 staff at B&B, or the 4,500 at Northern Rock. It's all "too early to say," came the reply.

But when "maximising value for the taxpayer" is the aim, cuts and closures seem inevitable.

Blackfriar wants to hear Yorkshire shouting the loudest when the decision is being made over where to locate the bad bank's headquarters. Crossflatts has the infrastructure and workforce to make it the ideal home for the merged organisation.

Newcastle will hang on to its bank when the good part of Northern Rock is sold. But Yorkshire has borne more than its fair share of suffering during the banking crisis.

Retaining the bad bank in Crossflatts is vital if the region is to drag itself out of the recession.

GIVEN the flurry of company flotations in recent weeks, you might be forgiven for thinking all is well in the IPO market.

Yesterday, four new companies joined the London Stock Exchange's main market. Between them, the initial public offerings of African Barrick Gold, Metric Property Investments, SuperGroup and CPP Group raised more than 900m.

It was a welcome surge of activity. Last year was a terrible year to debut on the stock market, as nobody knew what to price assets at and the appetite for investment was negligible.

This trend continued into 2010 with the withdrawal of 10 planned flotations including the high-profile 650m New Look IPO. New Look, owned by private equity groups Permira and Apax Partners, blamed "volatile markets" for its decision to abandon the listing. But in recent weeks, the IPO has been back in vogue.

York-based credit card protection company CPP Group raised about 150m with an offer price of 235p per share, at the lower end of the anticipated range.

Entrepreneur Hamish Ogston made about 120m from the listing, allowing a partial exit from the company he founded more than 30 years ago.

Emis Group, a Leeds-based medical software company, raised 50m from a listing which gives the company a market capitalisation of about 175m.

But while these flotations suggest a slight revival, corporate finance experts had actually been expecting far more IPOs this year. Institutions are said to be demanding a hefty discount to participate, which is proving a sticking point.

Bankers believe a 10 to 30 per cent discount in relation to peers is likely to be the norm to bring new investors on board.

CPP chief executive Eric Woolley said the share offer was "comfortably subscribed" – but with the flotation coming in at the lower end of expectations, pricing may have been an obstacle. On the day of flotation, shares surged 12 per cent.

After last year's ravages, which saw a trend of taking companies private, Blackfriar believes the recent IPOs show markets are picking up. But while potential investors can drive down prices so aggressively, the good times are still some way off.