Banking newcomer poaches Rock boss

BRITISH banking start-up NBNK Investments yesterday poached the chief executive of Northern Rock, the bank bailed out by the taxpayer after the 2007 credit crisis, to spearhead its challenge to established lenders.

Gary Hoffman, who with non-executive chairman Ron Sandler has been steering Northern to recovery before a return to the private sector, leaves with immediate effect and joins NBNK from 1 May.

Northern said Sandler would resume his previous role of executive chairman to which he was appointed at the bank's nationalisation in early 2008, and that there would be no hunt for a new chief executive.

Ironically, NBNK has been seen as one of the main potential buyers of Northern Rock. Under the terms of the switch by Hoffman, NBNK has committed not to bid for Northern for a year from 1 November.

Hoffman receives no bonus or severance package but Sandler revealed that Northern Rock will pay the his contractual salary of about 58,000 a month plus a monthly pension payment of 23,200 while he is on "gardening leave" until May.

Sandler defended the payment, plus an ongoing car and petrol allowance, as being in the interest of taxpayers because Hoffman held confidential information about Northern that could be of advantage to a potential competitor like NBNK.

"I'm convinced that we will be well positioned to develop our business and offer a compelling new proposition," Hoffman said in a statement.