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18 Feb, 2008

Marcel Le Gouais
Date: 18-Feb-2008

Nationalisation has been tipped as the most probable route for Northern Rock for the foreseeable future, its new executive chairman warned today.
Ron Sandler, the former Lloyd's of London chief executive who the Treasury has appointed to run the bank under public ownership, revealed the likely future of the bank in his first public speech in his new role at a press conference this lunchtime.

He says: "It is unrealistic to think it will be anything other than some years before we can return it to the private sector."

Sandler strived to assure NR customers that the bank would still be run competitively and that the brand would be retained, though he declined to comment on the expected job losses.

He says: "I'm not going to get into a conversation about job losses. I need to get to know the management first. I need to know the management's present plans. There will follow an open dialogue about the size and shape of the bank.

"I want to reassure staff that the process of temporary public ownership gives us a platform to move forward, away from the turbulent waters in which the bank has been sailing in recent months."

The new executive chairman says that because of public ownership and European state aid rules, NR will have to operate under a set of EU rules that will put constraints on the bank.

He adds: "What those will be is not yet known."

In response to a question about whether his job could have been made easier if the bank had been nationalised sooner, he says: "I'm not in a position to judge that. I have already met people who are confirming to me that this remains a well-managed institution."

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