The banker who steered Northern Rock through its emergency nationalisation a decade ago is to take the helm of Monzo, one of the new generation of digital financial platforms trying to disrupt their high street rivals.
Sky News has learnt that Monzo will name Gary Hoffman as its non-executive chairman on Wednesday, just months after a fundraising that valued the fledgling company at more than £1bn.
The appointment of Mr Hoffman will bring one of Britain’s most experienced bankers into the fold at one of the industry’s newest entrants.
Loss-making Monzo was founded just under four years ago by Tom Blomfield, a former management consultant, and gained its full banking licence in April 2017.
It now boasts more than one million users of its current account, and has set itself the target of becoming the principal hub for its customers’ financial affairs.
A former chief executive of Barclaycard and vice-chairman of Barclays, Mr Hoffman was parachuted into the Northern Rock job in 2008, he helped to stabilise the lender, which became the first British bank to experience a run on deposits in more than a century.
He left in 2010 to lead a new vehicle, NBNK Investments, which was set up to acquire retail banking assets from lenders which had been rescued by taxpayers.
After a bitter fight to buy more than 600 branches from Lloyds Banking Group concluded with the ill-fated decision to sell them to the Co-operative Group, NBNK was wound up and Mr Hoffman departed.
In 2012, he became chief executive of Hastings, the motor insurer, before taking over as chairman there two years ago.
Mr Hoffman has also become chairman of Coventry Building Society, which is based in the city he hails from and whose football club he has previously sought to acquire from the ownership of a controversial hedge fund.
His appointment as Monzo’s chairman will inevitably fuel talk that a public offering of the digital bank’s shares is on the horizon, but investors say the company’s financial resources means there are no short-term plans for a flotation.
Replacing Baroness Kingsmill, the peer who has chaired Monzo since 2015, Mr Hoffman’s arrival will also reflect regulators’ desire for fast-growing digital lenders to recruit directors with more extensive banking experience.
The coming 12 months is expected to see a rush for capital among many of Monzo’s rivals, with the likes of N26, Oaknorth, Revolut and Starling Bank all seeking new funding from investors.
Atom Bank, which counts the Spanish banking giant BBVA as its biggest shareholder, is expected to be sold or raise new capital this year.
Dozens of new banking licences have been handed out by regulators amid a government push to bolster competition across the sector.
However, many of the newest entrants remain loss-making and sub-scale, even as the costs of acquiring customers and running accounts remains well below that of traditional competitors.
Digital competition is not restricted to recent start-ups as the major high street lenders try to prevent their market share being swept away by nimble new entrants.
Royal Bank of Scotland, which remains under majority taxpayer ownership, has created a standalone digital banking brand called Bó, which it hopes to launch publicly this year.
Mr Blomfield has set ambitious targets for Monzo, including reaching three million customer accounts by the end of 2019, and seeing its tenfold revenue growth last year continue.
The company says about 100,000 people are signing up as customers every month, and it wants to diversify into business banking as well as providing a platform for investments and switching energy providers.
Monzo is expected to seek to expand geographically, too, with launches in Europe and the US in its sights.
Its most recent fundraising, which completed in November, saw the prominent technology investors General Catalyst Partners and Accel Partners become shareholders in the business.
Monzo declined to comment on Tuesday, while Mr Hoffman could not be reached for comment.