×

Northern Rock Appoints New Chairman

Britain's Northern Rock said Chairman Matt Ridley had quit just days after being grilled by lawmakers on the bank's crisis, and will be replaced by Bryan Sanderson, former chairman of Standard Chartered.

Northern Rock, forced last month to seek emergency funds from the Bank of
England due to the global credit crisis, said on Friday Ridley's resignation would take effect as soon as Britain's Financial Services Authority approves the appointment of Sanderson, who is well respected by analysts.

A spokesman said as Sanderson has already chaired a major UK bank approval was expected in the next couple of working days.

By 1500 GMT Northern Rock shares were down 5.7 percent at 192.9 pence, valuing Britain's fifth biggest mortgage provider at just under 900 million pounds ($1.8 billion).

"Sanderson was highly regarded at Standard Chartered but it's hard to say how relevant that is to what Northern Rock is going through at the moment," one analyst said.

Sanderson's experience in banking and working with the government "will prove invaluable to Northern Rock when considering future strategic options," Ian Gibson, senior non-executive director of the bank, said in a statement.

Takeover Talk

Northern Rock has until February to assess its options, which is expected to end in a sale. It has received approaches from several groups, including a consortium led by Virgin Group.

The spokesman said the process of appointing Sanderson had been in place since before Ridley bore the brunt of a three-hour grilling of Northern Rock directors by legislators on Tuesday.

That included Michael Fallon, a member of Parliament for the opposition Conservative party, asking him: "Does no one have any honour? Has no one offered to resign?"

Ridley responded: "I have made it clear that my resignation is available as soon as it is decided it is in the best interest of shareholders and stakeholders that I go."

Ridley, 49, chairman since April 2004 and on the board for 13 years, was criticised for his low profile as the crisis grew.

He is best known as a zoologist and science writer, authoring books including "Genome: The Autobiography of a Species in 23 Chapters".

Northeast Roots

Northern Rock Chief Executive Adam Applegarth and all other directors also offered to resign last month, but Gibson said investors and advisors wanted the board to stay on to steer the bank through its crisis.

Critics have rounded on Northern Rock's management since the Bank of England stepped in as "lender of last resort" on Sept. 14, sparking the first run on a major British bank for over 140 years.

It has borrowed an estimated 16 billion pounds at a penal interest rate from the BoE in the last five weeks.

The Newcastle-based bank has strong regional ties, and Sanderson grew up in County Durham, also in the northeast of England.

Sanderson, 67, spent 36 years at oil major BP, before joining Standard Chartered, where he was chairman from 2003 until last November. He left as the role was "taking more time and effort" than he wanted at that stage of his life, he said.

Like Northern Rock, he has strong links with the northeast's sports teams.

He is a director of Durham Cricket Club -- which is sponsored by the bank -- but has also chaired Sunderland football club, arch rivals to Newcastle United.