Sandler Seeks Hands-On Retail Banker To Finish Reshaping Rock

23 Jun 2008

· Emphasis shifting towards day-to-day business
· Rescue on track but requires 'fine-tuning'

Ron Sandler is preparing to step back from running Northern Rock and hand over the helm to a banker with experience of the retail market.

Sandler, who is paid £90,000 a month, will stay on as non-executive chairman of the nationalized bank. He has not yet appointed headhunters, nor will he say whether he expects an internal or external appointment or when the handover will take place. But the management consultant-cum-turnaround expert conceded the time was approaching when the bank needed "someone with more hands-on banking experience" to take on the job.

"In the early days, the key requirements have been to give the organization some sense of stability, some sense of direction - and getting the senior management focused on the creation and delivery of a plan," Sandler said in an interview with the Guardian. "That's been the agenda for the first four months. But there is another agenda beginning to take shape which is an operational agenda, which is how debt management is handled day to day - the design and fine-tuning of savings products, the design and fine-tuning of mortgage products and the detailed reorganization of some of our contact centers. That is a more operational focus and someone with more hands-on banking experience is going to be required."

Speaking as the anniversary approaches of first indications of a crisis at Northern Rock - it issued a profits warning in late June last year - Sandler declared himself "quite satisfied" that the bank is on track to repay the £24bn lent by the taxpayer. This is despite the downturn in the economy and gloomy outlook for the housing market.

Sandler, best known for his role in rescuing Lloyd's of London 13 years ago, has a clear remit: repay the taxpayer's loan and ensure that a debt-free Northern Rock can eventually be sold off. The plan is predicated upon a 60% redemption rate of mortgage customers - as they move to rivals and loans are repaid the money goes to the taxpayer - and winning enough savers to allow Northern Rock to be able to keep doing business without needing to turn to the money markets to raise funds. He must halve the gap in the bank's balance sheet to £50bn by 2011 and cut 2,000 jobs so the loan can be repaid by 2010 and allow the government guarantee for creditors and depositors to be lifted by 2012. read more….

Source:
http://www.guardian.co.uk/business/2008/jun/23/northernrock.banking