Nathalie Thomas: Budenberg must be brave – let's hope he's also bold at UKFI

IF THERE was an award for Britain's bravest banker then new UKFI chief executive Robin Budenberg would surely be in with a good chance.

There aren't many people who would willingly swap a lucrative investment banking job at UBS – which by all accounts earned him millions over the years – for a 150,000 job at the head of a government agency that is going to be trapped firmly in the eye of the storm over the next few years.

Although many of us would jump at any job paying 150,000 a year, it's difficult to imagine what prompted Budenberg to swap his comfortable, better-paid position at UBS for one that is rarely going to be out of the political or media spotlight.

Perhaps Budenberg is in on a secret that we aren't. Or perhaps it's the prospect of a fresh challenge that has tempted him into the dark corridors of the civil service.

Whatever the motivation, let's hope he took a good holiday before joining UKFI last month, because it'll be a long time before he's able to get his head above water long enough to relax for any length of time again.

Budenberg's in-tray of tasks that will have to be tackled over the next few months and years reads like a politician's worst nightmare.

His to-do list includes tackling the politically explosive issue of bonuses at Royal Bank of Scotland, selling the "good bank" of Northern Rock and overseeing the bidding process for the RBS and Lloyds Banking Group assets that have to be divested under European Union rules.

Not all of his tasks have an immediate deadline, of course, and RBS in particular has until 2013 to comply with European competition commissioner "Steelie" Neelie Kroes' ruling on its assets.

However, there is a growing feeling in the market that Budenberg cannot afford to take his time with the asset disposals, particularly in the case of Northern Rock plc, the good bank part of the nationalised lender that was officially separated from the toxic element on Monday.

So far Virgin Money, led by former RBS banker and rising star Jayne-Anne Gadhia, has been tipped as the frontrunner for Northern Rock, given its enthusiasm for buying the Newcastle-based lender before it fell into public hands. But sources within Virgin point to a growing frustration with the speed of the disposal process.

By UKFI's own admission, there is, as yet, no set timetable for the sale of Northern Rock and talks remain at a "premature stage".

The agency appears confident that it won't be short of bidders, with a number of new entrants eagerly waiting in the wings to make their debut in the UK banking market. Metro Bank, a start-up backed by US entrepreneur Vernon Hill, and a venture masterminded by veteran banking analyst Sandy Chen of Panmure Gordon are among those hoping to get Financial Services Authority approval to launch in the UK early this year.

But can UKFI afford to be so complacent?

Over the Christmas holidays it emerged that Virgin Money, which is hoping to secure its banking licence from the FSA before the end of this month, is looking to snap up another small lender in order to gain a footing in the market early this year.

Sources within the organisation say Gadhia is keen to get out of the starting blocks as soon as possible and is not prepared to wait for Northern Rock, RBS or Lloyds asset disposals to enter the race.

Although Virgin says it is looking at a "number of options", sources suggest that interest in Northern Rock is dwindling, given the length of time UKFI is taking over the sale.

One insider told me: "We can't rely on something like that because the divestment process hasn't even been outlined yet. We need to move ahead under our own steam."

There are, of course, other names in the hat for Northern Rock – Clydesdale owner National Australia Bank has again been linked to a potential bid. But if UKFI wants to secure the highest price possible through a competitive bidding process then it had better get its skates on. Budenberg will do himself no favours at the start of his new job if potential bidders are allowed to lose interest and fall by the wayside.

Having worked in the private sector for more than 25 years, Budenberg is used to working at a fast pace. Let's hope he can inject some of that culture into the notoriously slow civil service.