Rock boss is cautious for good reason
Aug 4 2010 by Andrew Hebden, The Journal
GONE are the days when you would find the occupant of the chief executive’s office at Northern Rock House making ambitious proclamations about the bank’s future growth plans.
Gary Hoffman is by nature a cagey and cautious character when it comes to making public statements – a far cry from his predecessors, whose excitable claims about how Northern Rock would soon be among the biggest banks in the land came crashing to earth so spectacularly in the latter part of 2007.
So, while he is not one to suggest Northern Rock is ready to get back in to the major league and play its part in shaking up the over-consolidated banking sector just yet, you do get the feeling that he would jump at the chance if it arose.
Since arriving at the Rock two years ago, Mr Hoffman has been preoccupied with saving the bank from disappearing altogether, then stabilising it amid unprecedented financial turbulence.
It has been a difficult job, with many painful decisions to be made along the way, but the brand has survived and, yesterday, its asset management business – don’t let him hear you call it the “bad bank” – announced a return to profit. So it’s not such a bad bank, after all.
As it is wound down and the mortgages (which don’t appear quite as toxic as we perhaps once thought they were) are paid off, the asset management business will deliver a tidy profit to the taxpayer.
But the interesting debate surrounds the future of the other, “perfectly formed”, half of the business, Northern Rock plc, which will at some point be sold off by its Government masters.
That could either happen soon – with the bank being a relatively small player which could make no material difference to competition in the sector – or at a later stage, in some form of beefed-up format.
One option, floated yesterday and certainly not dismissed when put to Mr Hoffman, would be to somehow add the 600 Lloyds branches on the market into the Northern Rock business. Suddenly, you might have a serious high street competitor capable of shaking up an industry increasingly seen from Westminster as having forgotten the fact that it owes the public purse for its very existence.
It is certainly a tantalising prospect and one, you suspect, the ambitious and highly-rated Mr Hoffman might rather enjoy getting his teeth stuck into.
But don’t expect him to say as much until much, much further down the line.
