Britain Faces $3.2 Billion Loss from Northern Rock Sale LONDON - Britain stands to lose £2 billion, or $3.2 billion, from the sale of nationalized lender Northern Rock to Richard Branson's Virgin Money, a government report on the sale said Friday. Even though the government is expected to recoup the £37 billion it injected into Northern Rock, the loss would result from the discounted loans the government handed to the lender, the National Audit Office said. The loss is the difference to a higher rate of return for the government money that a private sector investor would have asked for, according to the report. Northern Rock had to be nationalized in February 2008 when its troubled financing model caused a run on the bank and the government feared it would bring down Britain's banking system. The government sold the lender to Virgin Money almost four years later after splitting it from a mortgage portfolio that is being wound down. The report concluded that the sale to Virgin Money "was the best available option to minimize future losses" and that "value for money was preserved." "No alternative was likely to have been significantly better either in financial terms or in supporting mortgage lending," the report said. The British government is still seeking to sell its majority stake in the Royal Bank of Scotland and a smaller stake in Lloyds Banking Group, which it obtained as part of the bailouts of those banks.