NORTHERN ROCK’S “good”

bank could be sold almost immediately if the right offer came along, despite not officially being up-for-sale, its chief executive admitted.

As the company released its first set of results since its split on January 1, chief executive Gary Hoffman said Northern Rock plc was moving in the right direction for a sale to the private sector, although he stressed this would happen “only when conditions are right to do so, in the best interests of taxpayers”.

But when pressed on the subject, Mr Hoffman admitted that if someone made a realistic offer, the bank would have to take it seriously.

He said: “What I am clear about is I have not been set a deadline and no sale process or timetable.

“Of course, if someone wanted to make an offer, like they can for any company, then people would have to listen to that. We don’t have a for sale sign outside the door, but it is like anything.”

Half-year figures showed the bank’s Northern Rock Asset Management (NRAM) division reported underlying pre-tax profits of £167.3m in the six months to June 30 compared with a loss of £243.9m a year earlier.

Mr Hoffman said yesterday’s results reflected a “significant turnaround” from the past two years and also defended NRAM, to which the bank’s more toxic loans were transferred in January, from the perception it is a “bad bank”.

Mr Hoffman said: “I would disagree with the description of bad bank, given that 90 per cent of customers of Northern Rock Asset Management are not in arrears.”

NRAM, which is soon to be merged with the nationalised arm of Bradford & Bingley, also repaid £300m of its Government loan during the six months and despite still owing £22.5bn, Mr Hoffman was confident the full amount would eventually be paid.

He said: “We are confident that the Government loan will be repaid. We have repaid £300m of it in the past six months.

“What we expect to happen is the loan will reduce in the region of 50 per cent over the next five years and, over ten years, the vast majority of the loan will be repaid.”

Ironically the “good” bank Northern Rock plc reported an underlying interim loss of £140m as it was hit by rising costs, although Mr Hoffman said it was in line with expectations.

It also lost nearly £2bn of retail savings after the removal of the Government’s guarantee in May.

Mr Hoffman said: “We have got a business that is well capitalised and extremely liquid – a good platform for growth.

“In due course, we could think about expanding the product range again.”

This could include credit cards and unsecured personal loans, as well as an expansion of its current account offering.