One-time City darling Applegarth rode his one-trick pony too hard

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The Independent Online

Adam Applegarth joined Northern Rock as a management trainee from university chiefly because the job did not start until the autumn after his graduation, leaving him free to spend the summer playing cricket – he still turns out at a high level for his native Sunderland.

At the time, he had three offers from London-based institutions, but all started in July. It meant that what was then his local building society was the only choice, even though at the time he was not entirely clear what a building society was.

The smart money now is on him spending the next summer playing cricket, although he will only be able to resign after he has brought the company with which he has spent all his working life through its current crisis.

The fourth of five children, he was educated as a boarder at Sedbergh School in Cumbria but returned to the North-east as a student at Durham University.

After his cricketing summer, he did not have an auspicious start for his new employer – he has admitted to being late – but while working in different jobs around the society he caught the eye of its chief executive, the late Christopher Sharp, and found himself rapidly rising through the ranks.

He was made head of planning in 1989, became an assistant general manager in 1992 and was promoted to general manager a year later. He reached the board in 1996, beating several more experienced candidates to become the second-youngest chief executive of a FTSE 100 company in 2001, at the age of just 39.

Around him is a somewhat colourful board. His chairman, Matt Ridley, is a science writer by profession who got his doctorate by studying the sex lives of pheasants and is the son of the dry-as-dust former Tory cabinet minister, the late Nicholas Ridley. With him at the boardroom table is Sir Derek Wanless, the former NatWest boss who has been most recently telling Gordon Brown how he should run the health service.

But Mr Applegarth has always been the star of the show. Since he took the reins, Northern Rock has been Britain's fastest-growing bank, overtaking its rival former building society, Bradford & Bingley, and kicking on.

While the other former building societies outside Britain's big five banks, such as Alliance & Leicester and B&B, are regularly talked of as takeover targets, Northern Rock was seen as immune. Analysts regularly praised the bank's low cost base and aggressive business model, suggesting that the lumbering giants of the banking world would be wary of engaging with Northern Rock because the "crafty Geordie" at the top would take them to the cleaners.

That description is incorrect, in that the "Geordie" in question is from Sunderland, although he supports Newcastle United, whose shirts bear the company's name – as do those of the Newcastle Falcons rugby club and Durham County Cricket club.

In person, Mr Applegarth is soft-spoken and charming, yet confident and quick-witted. He can reel off figures at the drop of a hat and has always previously had ready answers to any questions that the journalists who follow the company cared to throw at him.

No longer. The business model pursued by Mr Applegarth was to relentlessly focus on building up its mortgage business. The bank aggressively ate into its rivals' market share, and did so without sacrificing credit quality. Where it went wrong is in the way those mortgages were funded. The company, under Mr Applegarth, became something of a one-trick pony, and, when the international money markets closed for business, funding those mortgages became impossible without the help of the Bank of England.

It has left Mr Applegarth, the one-time darling of the City, bowled middle stump.

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