But Ellis said that the reserves held by the foundation – whose expenditure in loans and grants to charitable causes was nearly £29m in 2006 – would allow it to “smooth things out”.
“Our covenant entitles us to 5 per cent of Northern Rock profits every year,” she said. “That has allowed us to give away £155m over the past 10 years. Even with the reduced profits predicted for this year, Northern Rock will still be one of the biggest corporate givers in the UK.”
She said that if the bank ever chose to break the covenant and reduce its level of donations, the foundation would be entitled to cash a 15 per cent shareholding in the company, which currently lies dormant.
“The founders of the foundation made good provision for us,” she said.
However, she refused to comment on speculation that the foundation might not be able to claim the full 15 per cent shareholding in the event of a takeover of Northern Rock.
“We don’t know what the circumstances would be,” she said.