Northern Rock chairman, Ron Sandler, who came in last year to rescue the struggling bank, has revealed that he will be stepping back and appointing a new chairman who has more appropriate experience with which to handle the next stage of the bank's recovery plan.
Mr Sandler, who will stay on as non-executive chairman, told the Guardian that he will be looking for someone "with more hands-on banking experience", but would not say whether the post will be given to an internal or external candidate.
As the anniversary approaches of the bank showing signs of being in trouble when it issued a profit warning in late June 2007, Mr Sandler said that the bank is currently on track to repay its contingency loan from the Bank of England, despite the current economic climate and a downturn in the property market.
The new business model is going to plan, he said: to repay its debt to the taxpayer, and ensure that Northern Rock can eventually be sold off. This is being achieved by redeeming 60 per cent of its mortgages by diverting business to its competitors, and building up sufficient savings to continue doing business without using the money markets to raise capital.
It will also be cutting back by letting go of 2,000 employees, but will simultaneously be hiring feverishly in its mortgage arm in order to more adequately monitor its customers and spot the ones that are struggling to pay their mortgage
before they fall into arrears. The bank has also banned its staff from using their own discretion to determine whether or not a customer is in arrears.
Of his decision to relinquish his post to someone with more relevant experience, Mr Sandler explained that the bank was very much connected to the part of the country where it has its headquarters and said that "you can't arrive like some occupying power".
He has also commissioned lawyers to determine whether or not legal action should be taken against Northern Rock's previous board members for any behaviour which might have led to the bank's nationalisation.
Blame for Northern Rock's downfall has been directed at a number of parties – the Bank of England, the Treasury, the Financial Services Authority; but while the bank has been a "victim of external circumstances", Mr Sandler was firm that there were also "some failings in the bank".
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