Bloomberg News

Northern Rock Names Thompson Non-Executive Director

January 18, 2008

Northern Rock Plc, the U.K. bank bailed out by the Bank of England, named former Resolution Plc Chief Executive Officer Paul Thompson as a non-executive director as the company seeks to maintain its independence.

Thompson, 45, is also a former managing director of Merrill Lynch & Co. His new role will become effective upon approval by the U.K.'s Financial Services Authority, the Newcastle, England- based company said today in a statement.

Thompson is being considered to run Northern Rock, as a replacement for Chief Executive Officer Andy Kuipers, should the bank remain independent, Chairman Bryan Sanderson said Jan. 15. Northern Rock, which borrowed about 24 billion pounds ($47 billion) from the central bank, is awaiting a funding assessment from Goldman Sachs Group Inc. that may determine whether it is nationalized or sold to a private buyer.

``If they are not able to arrange a third-party sale that is not too diluting for shareholders, maybe a self-help solution is the thing,'' said Mamoun Tazi, a London-based analyst at MF Global Securities Ltd. who has a ``neutral'' rating on the stock.

Thompson previously headed U.K. insurer Britannic Group Plc, bought by Resolution for 835 million pounds in 2005. He stepped down from the combined company in March of last year.

Northern Rock rose 2.4 percent to 64.5 pence in London trading, valuing the bank at 271.7 million pounds.

Packaging the bank's mortgages into bonds and selling them to investors may be one proposal put forward by Goldman Sachs, Sanderson said earlier this week.

To contact the reporters on this story: Jon Menon at jmenon1@bloomberg.net

To contact the editors responsible for this story: Adrian Cox at acox2@bloomberg.net; Frank Connelly fconnelly@bloomberg.net;


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