Northern Rock chief executive Gary Hoffman has stepped down from the role and from the Northern Rock board with immediate effect.
Non-executive director Ron Sandler will become executive chairman with immediate effect. Sandler was appointed as executive chairman of the bank when it was nationalised in February 2008.
Hoffman will take gardening leave from the company until April 30, 2011 before moving to become chief executive of NBNK Investments.
NBNK has committed not to make a bid for Northern Rock for a period of 12 months from November 1, 2010.
Hoffman leaves Northern Rock with his contractual entitlement, but no bonus or severance package.
He was appointed chief executive of the former Northern Rock business on October 1, 2008.
The bank restructured in January 2010 to create two separate companies: Northern Rock (Asset Management), the so-called ‘bad bank’ which holds residential mortgages, unsecured loans, and the Government loan; and Northern Rock plc which holds deposits and offers new mortgage lending.
Following the restructure Hoffman became chief executive of Northern Rock and NRAM. He stepped down as chief executive of NRAM on October 1, 2010, following the establishment of UK Asset Resolution Limited, the new holding company for NRAM and Bradford & Bingley plc.
Sandler says: “The board recognises the role Gary has played in the rehabilitation of Northern Rock and thanks him for his significant contribution. I will resume my role as executive chairman for the foreseeable future and, along with a strong board and executive management team, provide the continuity of leadership in the bank at this important time. I am looking forward to returning to the role I had in 2008.”
Hoffman says: “We have achieved a great deal together at Northern Rock in the last couple of years in the best interests of taxpayers. I have enjoyed my time with Northern Rock immensely. However, it is now time for me to take on a new challenge.”