Partner Article

Rock defends pay-outs

The chief executive of Northern Rock was buoyant about the bank’s future yesterday as he defended its policy to reward staff with bonuses of up to £3,000.

The bonuses will affect 4,500 staff - many of which are based in the Newcastle and Sunderland area.

The bank, now known as Northern Rock (Asset Management) plc, yesterday said it had cut pre-tax losses from £1.36bn in 2008 to £257m last year.

Chief executive, Gary Hoffman, said: “We are making good progress, certainly given where we were one year ago and two years ago, this feels like a different world.”

Mr Hoffman paid tribute to the banks staff of the North East for their hard work and dedication in helping the bank better government set targets of pre tax losses by over £500m.

“ There is not reward for failure,“ he said.

“ I understand that we are still loss-making but we have beaten the target and we have substantially improved financially.“

He added: “ We’re on the right trajectory and this is credit to the ongoing hard work and dedication of all of my colleagues here at Northern Rock. They’ve been through a lot in the last two years and have been really resilient and are an important part of this transformation.“

Meanwhile, Northern Rock Plc, the new bank formed at the beginning of the year, yesterday defended its decision to sponsor Newcastle United for the 2010/2011 football season despite its debt to the taxpayer.

A Northern Rock Plc spokesperson, said: “ Northern Rock plc takes its responsibilities under public ownership seriously and at all times ensures it is making the best possible decisions in the long-term interests of its customers and shareholder. It is mindful of its responsibilities under Government ownership and only considers those advertising and promotional channels that deliver a high return on investment and good strategic fit. It believes the sponsorship deal with Newcastle United provides both of these.“

This was posted in Bdaily's Members' News section by Ruth Mitchell .