Head of Northern Rock to step down

Monday, 23, Jun 2008 10:47

The new chief of Northern Rock - appointed by the government in February following the nationalisation of the bank - is set to step down from his post.

Ron Sandler took up the post of chairman of the bank after the government failed to find a buyer for the troubled mortgage lender.

However, he is now set to step down and take the role of non-executive chairman, as he looks for candidate with more banking experience to head the bank.

In an interview with the Guardian, he said: "In the early days, the key requirements have been to give the organisation some sense of stability, some sense of direction - and getting the senior management focused on the creation and delivery of a plan.

"That's been the agenda for the first four months."

But now, he explained, someone is needed to run the bank and focus on areas such as debt management, new savings products and the fine-tuning of mortgage products.

"That is a more operational focus and someone with more hands-on banking experience is going to be required," he told the newspaper.

Mr Sandler's role at the nationalised bank is to make sure it repays the loan made by the Bank of England, and return the bank to profitability so it may be sold out of public hands.

Last month it was revealed the bank had already repayed £2.8 billion of the £27 billion loan and 25 per cent will repaid by the end on the year.

The full loan is predicted to be returned by the end of 2010, although this is dependent on how long the current property crisis lasts.

Northern Rock is expected to start breaking even in 2011.

In a bid to cut back the size of the bank, Northern Rock is now encouraging its own mortgage customers to remortgage with other lenders, and has set up an agreement with Lloyds TSB to take its borrowers when their fixed deals close.

Daniel Barnes