Northern Rock chief Gary Hoffman steps down
Nov 4 2010 The Journal
NORTHERN Rock today confirmed Gary Hoffman has stepped down as chief executive with immediate effect.
Mr Hoffman, who has run the nationalised Newcastle-based bank since 2008, will be on garden leave until next April when he will join NBNK Investments, a new banking start-up led by Lloyds of London chairman Lord Levene. NBNK was set up to acquire bank assets owned by the Government.
Ron Sandler, who led the failed lender in the months after its multi-billion state bailout, will take up the position of executive chairman in the interim.
Mr Hoffman’s departure is the latest high-profile move in the banking sector, which has seen changes at the top of Barclays, HSBC and most recently Lloyds.
He garnered praise for leading the recovery of the Rock and for overseeing its separation into two separate businesses. His experience managing a state-owned bank undergoing a radical restructure would qualify him well for a new venture launched to bring fresh competition into the high street banking sector.
He had been running the so-called “good bank” Northern Rock plc, which manages about £19bn in savings and £10bn of mortgages, after last month giving up running the “bad bank” Northern Rock Asset Management, which has been left with the majority of the lender’s loan book.
With most of Northern Rock’s debts paid off and as the process of selling the good bank back into the private sector continues – and is likely to do so for many months yet – there had been speculation he was looking for a new challenge.
The 49-year-old left Barclays, where he was vice chairman and executive director, to take up his role at Northern Rock in October 2008.
Most recently Mr Hoffman announced that the Rock now handled a fifth of the mortgage business market it ran at its peak and also that it was cutting 650 of its 4,500 staff to save money.
NBNK, which raised £50m in a stock market listing two months ago, is headed by Lord Levene, the chairman of Lloyd’s of London and includes among its board members Sir David Walker, who led a review of corporate governance in the banking sector for the former Chancellor, Alistair Darling. It aims to create a new UK high-street bank, with a network of 400-600 branches so that it might claim 6% of the market.
However, it was reported today that NBNK has agreed not to bid for Northern Rock plc. But it is also looking to snap up hundreds of Lloyds branches that have to be sold under the orders of the European Commission. It may also look at buying up Yorkshire Bank and Clydesdale Bank.
