NORTHERN Rock’s so-called “bad bank” has a new chief executive after yesterday being merged with the nationalised arm of Bradford & Bingley.

A holding company, UK Asset Resolution (UKAR), has been established to oversee the two financial institutions, although they will remain as separate legal entities.

Gary Hoffman, who has been chief executive of both Northern Rock Asset Management (NRAM) and Northern Rock plc since they split in two on January 1, has stepped down as chief executive of NRAM.

Richard Banks becomes chief executive of UKAR.

Mr Hoffman said: “NRAM has a growing reputation for helping those customers facing financial difficulty.

“I have stepped down as chief executive of NRAM with pride in what we have all achieved.”

Mr Hoffman added: “This integrated structure, with NRAM and Bradford & Bingley under common management and governance creates the opportunity to deliver maximum value for the taxpayer.”

It also emerged yesterday that NRAM has paid back £1bn of its £23bn Government loan this year, £700m of it since June 30.

Bradford & Bingley was nationalised in 2008, but its savings books were sold to Santander.

Northern Rock was nationalised in the same year.