Northern Rock chair to pick up where resigning chief executive leaves off

Northern Rock intends to fill the management vacuum caused by the resignation of chief executive Gary Hoffman by giving the current chairman Ron Sandler a bigger role in the day-to-day running of the nationalised lender. Hoffman has spent the weekend finalising his departure plans and an announcement is expected shortly. The highly-regarded bank boss is thought to be keen to join a start-up venture that intends to buy up branches being sold off by other banks. The cash shell NBNK run by Lloyd's of London chairman, Lord Levene, has raised £50m to allow it float on the stock market's Alternative Investment Market, but intends to raise more to enable it to bid for the 600 branches that Lloyds Banking Group must sell to appease EU regulators in return for getting £20bn of state aid. Hoffman was hired with much fanfare from Barclays and is one of the highest earners in the public sector , with a salary of £700,000 before bonuses are included. His arrival in October 2008 allowed Sandler to step down from a full-time executive role that he was handed by the then prime minister Gordon Brown when Northern Rock was nationalised in February 2008. The move allowed Sandler, a well-known company troubleshooter, to expand his range of activities and become the chairman of Pearl , the zombie insurance company that has since changed its name to Phoenix . Sandler, born in Durban and raised in Zimbabwe, was a familiar figure in the insurance world in the 1990s as a result of being involved in the rescue of the Lloyd's of London insurance market before he was parachuted into NatWest a decade ago in an attempt to fend off hostile bids from Bank of Scotland and Royal Bank of Scotland, which eventually won control. Sandler will in effect be moving back to the position that he held until Hoffman arrived, and will be regarded as a key player in helping UK Financial Investments, the body that oversees the taxpayer's stakes in the bailed-out banks, return Northern Rock to the private sector. Northern Rock declined to comment. UKFI is now responsible for two parts of Northern Rock which Hoffman split into a "good" bank, which is lending again, and "bad" bank that contains government loans and the troubled home loans. Last month UKFI merged the "bad" bank of Northern Rock, with the mortgage books of Bradford & Bingley to create UK Asset Resolution to allow all the "bad" mortgages to be run off.