LONDON (Thomson Financial) - Stricken UK mortgage lender Northern Rock confirmed it intends to pay some 59 mln stg in dividends to shareholders next month, following a press report that it had taken legal advice on the payout.
A Northern Rock spokesperson said investors will receive a dividend for the first half of 2007 as scheduled on Oct 26. In July, the bank set the interim dividend at 14.2 pence per share, up 30.3 pct compared with the first half of 2006.
The spokesperson declined to comment on a Financial Times report that Northern Rock had taken advice on whether it was legally obliged to make the payment.
The dividend payment is scheduled six weeks after the lender was forced to seek emergency funding from the Bank of England after being hit by this summer's global credit crunch.
According to the FT, if Northern Rock decides not to pay the dividend, it is likely to announce the decision before Sept 28, as only investors featuring on the shareholder register by that date are eligible for the payout.
The bank affirmed its intention to pay the first-half dividend on Sept 14, when it first revealed that it had sought the BoE's support.
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