The proposals, which will form the core of its official business plan to be submitted to the Treasury, outline measures to cut approximately a third of staff by 2011 to create a 'smaller, more focused, financially viable mortgage and savings bank.'
In addition, the bank's risk outlook has been significantly altered. It will 'maintain a modest level of new loan origination' while increasing the level of retail deposits with the ultimate goal being to reduce its asset base by half.
The proposed changes to its current operating system are designed to demonstrate the lender's commitment to progress, with the intentions of repaying the Bank of England loan and subsequently removing all government support within the next three to four years.
The full business plan will be submitted to the government for approval before the end of March.
Ron Sandler, executive chairman of Northern Rock said the lender was making "good progress" towards the creation of a "robust" business plan.
He added: "This will be a demanding plan, and one that will carry a number of financial and operational risks.
"Market conditions remain uncertain and a protracted downturn in the housing market would clearly present challenges to its achievement. But we are testing it carefully across a range of scenarios and are confident that we can produce a plan that will be delivered.
“We will work sensitively with our staff and UNITE to minimise the extent and impact of job losses. I am determined that Northern Rock will remain a major employer in the North East with sufficient financial strength and stability to allow it to return, in due course, to the private sector.”
