NR to lend £5bn each year

Northern Rock will lend around £5bn each year during the next three to four years, its executive chairman reveals.

Ron Sandler, speaking this morning at a telephone press conference, says he regards this strategy as sufficient to retain NR’s presence in the market.

He adds: “We are going to continue to lend money but at nothing like the levels we were doing in the first half of 2007.”

NR held this morning’s conference after publishing its full year results for 2007, which reveal a £167m loss for the year and plans to increase its retail deposits, while not operating too competitively with state-backed products.

Sandler says: “We are determined not to compete on an unfair basis. There’s a difference between not competing unfairly and not competing at all.

“We think we have achieved the right balance here. We want to increase our retail deposit base while at the same time restricting the extent to which we compete.”

He adds: “We have conducted research into attitudes towards Northern Rock. There is a steady stream of savers returning and because of the products and servers we offer, we are confident that we can modestly grow our retail deposits.”

Sandler says the bank expects retail funding to reach £20bn by 2011. He says he hopes this will reach £25bn in the years after 2011.

He refused to be drawn into offering his opinion on whether former chief executive Adam Applegarth deserved his severance package of £785,000.