New Northern Rock boss appointed

I am excited by the prospect of leading the company back to a position of strength Gary Hoffman

Northern Rock has appointed the vice chairman of Barclays, Gary Hoffman, as its new chief executive.

Mr Hoffman replaces current chief executive Andy Kuipers, who will leave on August 31 after 20 years at the Newcastle-based lender.

Mr Kuipers is the final member of Northern Rock's original board to leave the bank after last year's crisis.

Northern Rock was nationalised in February following the first run on a British bank in more than a century.

Mr Hoffman's basic salary is £700,000 and he will also receive three separate payments of £400,000 in compensation for the loss of his participation in Barclays' long-term incentive plans.

"I am excited by the prospect of leading the company back to a position of strength," Mr Hoffman said.

Educated at Cambridge University, Mr Hoffman, 47, joined Barclays 1982 and previous roles include chairman of UK banking and chairman of Barclaycard.

Shake-up

Since being nationalised in February, Northern Rock has said it will cut about 2,000 jobs by 2011 and reduce its residential mortgage lending by half.

Ron Sandler, the former Lloyds of London boss appointed by the government to run the bank as executive chairman when it was nationalised, will became non-executive chairman when Mr Hoffman takes up his role in October.

Northern Rock's previous chief executive, Adam Applegarth, resigned in December following fierce criticism of his role in expanding the former building society too quickly.

Northern Rock doubled its share of UK mortgage lending under Mr Applegarth, but ran into difficulties in September when it was no longer able to fund that mortgage lending by borrowing in wholesale money markets.