B&B managing director to head new 'bad bank' as hopes rise for jobs in region

UK Financial Investments (UKFI) recently confirmed it will merge B&B's 39bn loan book with Northern Rock Asset Management's (NRAM) 54bn portfolio of troublesome loans under one holding company. The two banks were nationalised during the banking crisis.

Yesterday UKFI said banking veteran Mr Banks will be chief executive of the combined lender, alongside Richard Pym as chairman.

The appointments will reinforce hopes that West Yorkshire will win the bulk of the work to run the combined loanbook.

However, Mr Banks, based at B&B's headquarters in Crossflatts,

yesterday said no decision has been made on where to base the new organisation.

Most of B&B's 950 staff are based at Crossflatts, while Northern Rock's 4,500 staff are split between its Newcastle head office, Doxford in Sunderland, and its branch network.

Mr Banks said: "We have not made any decisions about locations and people, other than we expect to retain a presence in both the North East and Yorkshire. There's no cunning plan to decamp out of Yorkshire." It was widely expected Mr Banks would be appointed chief executive of the bad bank alongside Mr Pym, as they worked together for years at Alliance & Leicester.

Howard Kew, chief executive of Financial Leeds, has been lobbying for West Yorkshire to retain a significant proportion of work.

He said: "In terms of continuity, I would say it's a good thing. It indicates that there's no radical restructuring going on here."

UKFI said there is no timescale on bringing together the two loanbooks and appointments are subject to approval from the FSA.

Once the merger is complete, Gary Hoffman, current co-chief executive of NR(AM) and Northern Rock plc, will be chief executive of Northern Rock.