Rock chief leaves firm

13-12-2007

Rock chief leaves firm
Troubled bank Northern Rock has confirmed its chief executive Adam Applegarth has now left the company.

The Newcastle-based lender revealed in November Mr Applegarth intended to stand down from his post, but confirmation of his departure has surprised some commentators who had expected him to leave in the new year.

News of the management change came as Northern Rock revealed it would take a £281 million hit as a result of its exposure to current problems in the credit markets.

Andy Kuipers, formerly responsible for coordinating Northern Rock's sales, marketing, products and pricing initiatives, will now face the challenge of heading the bank after its recent troubles.

His appointment as chief executive of the company will take effect following approval from the Financial Services Authority (FSA).

Meanwhile, Northern Rock also confirmed today it was continuing talks with various suitors.

The company revealed it had continued to pursue discussions with a consortium led by Sir Richard Branson's Virgin Group, its preferred bidder, on "an accelerated basis".

Northern Rock said it was also holding talks with other parties, including investment bank Olivant, as part of a review of its strategic options.

However press reports claim the company, led by former Abbey chief executive and veteran troubleshooter Luqman Arnold, has written to Northern Rock threatening to pull out of the race to take control of the lender unless its board makes a final decision about its future by Christmas.

But Northern Rock today repeated its objective of completing the review of its business by February 2008.

A report in the Times newspaper yesterday claimed a third contender, US private equity group Cerberus, had already withdrawn its interest in Northern Rock.

Northern Rock opened up to offers after it found itself at the centre of the first run on a British bank in almost 150 years in September, when it was forced to turn to the Bank of England for an emergency loan.

The lender is subsequently believed to have borrowed further cash from the central bank, having initially approached the institution because it was unable to raise sufficient funds on the wholesale money markets due to the global credit crunch.

In a separate development yesterday, Northern Rock was named as one of seven companies which have been dropped from London's FTSE 100 index of leading shares. The bank's departure, announced following the quarterly shake-up of the index, comes as a result of its share price having plummeted in the wake of its recent difficulties.

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