As the Northern Rock crisis continues, investment in the bank has been deemed risky by a shares advice expert.

After the Treasury announced its plans for the bank, afternoon trading saw a 36 per cent increase in its shares, according to the Share Centre.

The £25 billion loan given to Northern Rock by the Bank of England is to be converted into bonds which will then be sold to investors reducing the likelihood of nationalisation, the firm stated

Andy Parsons, advice team manager at The Share Centre, said that whether this kind of “restructuring” of debt would prove successful is in the hands of investors given that they would no longer have to “shoulder the burden” of outstanding loans.

He added: “We still feel that Northern Rock is an extremely high-risk investment. We are advising investors who already hold shares to continue to hold, whilst those new to investing should seek individual advice.”

The Share Centre recently announced two new funds initiatives that aim to minimise potential risk by offering diversification.

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