Rock to reveal boss’ payoff
NORTHERN Rock will today reveal details of the pay-off for its former boss and millions paid in advisory fees when it posts results for the first time since the bank’s crisis.
The now-nationalised lender will show that former chief executive Adam Applegarth could receive up to £760,000 after quitting last December.
The “golden goodbye” is due to be outlined in Northern Rock’s annual report due out today, which will also finally include the bank’s long-awaited results for 2007.
The report is expected to show Northern Rock forked out more than £55m in fees to legal, banking and accounting advisors in the strategic review that led to its nationalisation last month. But the bank has promised to repay its £24bn loan from the taxpayer, in full by 2010.
Northern Rock’s results will also reportedly see it admit interest payments to the Bank of England and a raft of write-downs related to the US sub-prime mortgage crisis wiped out profits last year.
It is believed the financial hit from Northern Rock’s “toxic” debt totalled around £400m.
Northern Rock was forced to go to the Bank of England for emergency funding last autumn when its funding lines dried up amid the credit crunch.
Its funding troubles panicked depositors, with thousands queuing up to withdraw money in the first run on a UK bank in more than 140 years.
The 2007 results will show for the first time the exact amount borrowed from the Bank of England last year and the extent of the deposits and mortgages gained and lost, although trading since the year-end is not set to be included.
Northern Rock’s new boss is also scheduled to use the report to provide a fuller update on his business plan for the Newcastle-based lender.
He may reveal that the bank’s £100bn mortgage book has already been considerably reduced as part of plans to scale back the business and pay off its vast borrowing before a return to the private sector.
Mr Sandler, the new executive chairman, set out plans earlier this month to axe around a third of the company’s 6,000 jobs to slim down the company.
