Northern Rock yesterday began laying the groundwork for the independent future that executives at the bank still hope to secure, appointing Paul Thompson, the former chief executive of Resolution, as a non-executive director.
Mr Thompson is understood to have been lined up as the next chief executive of Northern Rock if the bank is not nationalised or bought out by one of the two potential bidders currently trying to raise funds for its acquisition. He is thought to believe the bank can secure funding and the Government's blessing to remain independent but is reluctant to become chief executive until the decision has been made.
Mr Thompson has experience of financial restructuring after turning around Britannic Insurance before it merged with Resolution, the closed fund insurer, which he ran before stepping down last year. He was a managing director in Merrill Lynch's financial institutions group before joining Britannic in 2002. Northern Rock was one of his clients at Merrill, which is advising the bank on its options.
Bryan Sanderson, the bank's chairman, said various versions of "self-help" were under consideration as the bank mulls which option to recommend to the Government and its regulators.
The Government is desperate to avoid nationalising the bank but any alternative will require massive funding to start repaying about £24bn to the Bank of England. Goldman Sachs has suggested to the Treasury that the Bank of England loans could be sold as bonds with a Government guarantee.
A banking analyst said: "Going it alone seems more feasible than it was at the tail end of last year. We are in for a period of uncertainty and it would be less disruptive for the business than a sale."
Mr Thompson's appointment came as Virgin, one of the two prospective bidders, beefed up its team by adding Peter McNamara, the former managing director of Alliance & Leicester, to oversee risk if Virgin is successful.Reuse content