Merged 'bad bank' to keep loans headquarters in region

UK Financial Investments (UKFI), which oversees State banking assets, yesterday confirmed that UK Asset Resolution (UKAR), the new holding company for the loan books, will be based at Bradford & Bingley's Crossflatts home in Bingley.

The 1,250 staff at Northern Rock Asset Management (NRAM) will remain at offices in Newcastle and Sunderland for the time being but the firm said it could not rule out moving some of its operations to Yorkshire in the future.

B&B currently employs 950 staff at Crossflatts.

Both organisations said no further job losses were now expected following the move but neither knew what could happen in the future.

A B&B spokesman said: "That is not the key driver. We can make a number of efficiencies without job losses.

"We don't know what will happen in the future but there are no job losses announced as a result of the announcement of UKAR."

UKFI said the decision to choose Crossflatts was "practical" as it was already set up as a corporate headquarters.

Northern Rock's Newcastle head office will be the main base for its so-called "good bank".

The merger of B&B's 39bn mortgage book with Northern Rock Asset Management's 54bn portfolio of troublesome loans was confirmed in March this year.

The move sees Gary Hoffman, chief executive of NRAM and Northern Rock, step down to concentrate on heading the so-called good bank, with Bradford & Bingley managing director Richard Banks taking over as chief executive of UKAR.

Mr Hoffman said: "NRAM returned to profitability in the first half of 2010 as income increased, impairment charges were reduced and arrears continued to stabilise.

"This trend has continued in the third quarter and I feel NRAM is being handed over in good shape for the future."

NRAM said it has paid back another 1bn in taxpayer cash this year after ramping up its debt repayments, although it still owes more than 20bn.