Northern Rock to be scaled down over next few years

According to a recent report the government appointed chief executive of Northern Rock, Ron Sandler, is planning to cut the size of the business over the next few years, and could end up scaling the bank down to half of its current size in terms of assets and employment.

The bank has already been turning custom away in a bid to begin on the downscaling exercise.

The current assets of Northern Rock, which passed into public ownership earlier this year following a number of unsuccessful private sale talks, stand at around £107 million, and Sandler wants to try and cut the assets by around 50% by 2011. The number of employees will also be cut significantly by this time in line with Sandler’s plans.

Northern Rock has been directing customers to rival lenders recently in order to try and cut back on business, and will continue to do so in the imminent future.

A number of other moves have been outlined by Sandler in order for the downscale to be achieved by the target date.

In the meantime, Sandler has confirmed that the bank is expected to continue making losses over the course of this year.

The bank ran into severe difficulties last year after it took an emergency loan from the Bank of England, after which it became the victim of the first run on a British bank in almost a century and a half.