Northern Rock chief executive Gary Hoffman to join NBNK

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Image caption, Northern Rock chairman Ron Sandler will take over the chief executive's responsibilities

The chief executive of Northern Rock, Gary Hoffman, is leaving to join a new banking venture, NBNK.

He has been put on gardening leave until he officially starts at NBNK next April.

During that time, he will be paid £350,000, plus pension contributions by Northern Rock, which is wholly owned by UK taxpayers.

NBNK Investments has raised £50m to fund its plan to establish a new bank with branches on the UK High Street.

It has pledged not to make a bid for the nationalised bank within the next 12 months.

Northern Rock chairman Ron Sandler will take over the chief executive's responsibilities and become executive chairman for the forseeable future.

Mr Sandler paid tribute to Gary Hoffman's contribution to the rehabilitation of the Newcastle-based bank since he joined in 2008.

Northern Rock almost collapsed in 2007 after the credit crunch exposed the weaknesses of its business plan, which relied on borrowing heavily from the financial markets to fund lending rather than using customers' savings deposits.

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