FORMER Northern Rock boss Gary Hoffman has been linked with a bid for his former company, renewing speculation it could be bonded with the branches being sold by Lloyds Banking Group.
Hoffman left Northern Rock for NBNK last November, and as part of the terms of his departure he was prevented from making a bid for the state-owned bank until next month.
However, according to sources cited in the Mail on Sunday, NBNK has been preparing an offer for “some weeks”, and is in a mood to compete with fellow bidders Virgin Money and JC Flowers. The paper said Hoffman has been given clearance to start preparing a bid after approaching Northern Rock and UK Financial Investments, which was set up in 2008 to deal with the banking assets held by the Treasury. Hoffman was appointed chief executive of Northern Rock back in 2008 after the bank was nationalised, and insiders say he could well benefit from his knowledge of the business.
The prize for a successful bidder for Northern Rock’s “good bank” would be the branch network, back office systems, customer deposits and a small part of the mortgage business. The remainder of the mortgage business is held separately by Northern Rock Asset Management. Updated bids are due by October 31.
NBNK was set up last year by outgoing Lloyds of London chairman Peter Levene, and has already been linked with the Yorkshire and Clydesdale bank operations of National Australia Bank.
It is already a committed bidder in the race for the 632 branches put up for sale by Lloyds. It launched a bid of £1.5bn in September, and confirmed it had put in a second round bid for the branches.
Last week, reports suggested Hugh Osmond’s Sun Capital Partners were unlikely to enter a second round bid for the selection of branches which have been dubbed “Project Verde”. Lloyds were forced to put the branches up for sale to meet European competition rules, and Co-operative Financial Services are also interested in the package.
It has been suggested that mixing them in with Northern Rock could be an option”.
Northern Rock, UKFI and NBNK have not offered comment on the story.
