Former Abbey chief executive Luqman Arnold is heading a rescue bid for beleaguered Northern Rock.
Olivant Advisers, an independent investment group led by Luqman, is proposing to send in a team of its principals to work alongside the existing board and management.
Olivant says it is not interested in taking over Northern Rock but would take a minority stake in the bank.
Virgin has been circling Northern Rock for several weeks and is set to launch a full takeover bid. Unlike Virgin, which described the Northern Rock brand as “dead in the water”, it is understood that Olivant would look to rebuild its image.
Arnold, a former investment banker at UBS, has a strong reputation in the City, having stabilised and restructured Abbey before selling it to Spanish firm Santander.
Hargreaves Lansdown head of UK equities Richard Hunter says: “Arnold is famed for turning Abbey around before selling to Santander and he could make the difference at Northern Rock. The problem is that one cannot help but think that the horse has bolted.
“With a number of suitors still targeting the firm, much will depend on it finding capital to prevent it selling off some of its prized assets such as its mortgage book but, with markets as they are, it is looking like a tough job.”