NORTHERN Rock’s chief executive Gary Hoffman could resign from the state-owned financial institution next week, after being linked with the top job at a new bank.

Mr Hoffman is understood to be a leading contender to run NBNK Investments, which started trading in August and has plans to bring fresh competition to the high street banking sector.

Reports yesterday suggested he was on the point of stepping down from the Newcastlebased lender.

Last night, a Northern Rock spokeswoman said: “We don’t comment on speculation.”

NBNK Investments, which is chaired by Lloyds of London chairman Lord Levene, will focus on lending to British consumers and small businesses.

The new bank, which could potentially buy up Northern Rock assets, aims to establish a network of between 400 and 600 branches across the UK serving around six per cent of the banking market.

NBNK board members include Sir David Walker, who carried out a review of the UK banking sector for the government and Lord McFall, former head of the Treasury Committee.

Mr Hoffman may also be in the frame to replace Lloyds’ chief executive Eric Daniels when he retires next year.

Until earlier this month, Mr Hoffman had been chief executive of both Northern Rock Asset Management (NRAM) and Northern Rock plc since they split on January 1.

But earlier this month, he stepped down as chief executive of NRAM – dubbed Northern Rock’s bad bank, although it was a term Mr Hoffman disliked, when it was merged with the nationalised arm of Bradford and Bingley.

He remained at the helm of Northern Rock plc – the “good bank”.

Mr Hoffman, 49, left Barclays, where he was vicechairman and executive director, to take up his role at Northern Rock in October 2008.

He replaced Ron Sandler, who relinquished his full-time executive role to become nonexecutive chairman after steering the bank through nationalisation in February.