SENIOR UBS banker Robin Budenberg is set to be named today as the new chief executive of UK Financial Investments (UKFI), the Treasury unit that manages the government&rsquo;s holdings in UK banks. <br /><br />Budenberg&rsquo;s first job will be to oversee the break up of Northern Rock into a &ldquo;good&rdquo; and a &ldquo;bad&rdquo; bank &ndash; a plan that is expected to get the go-ahead from the European Commission today.<br /><br />The European Union is expected to approve UK authorities&rsquo; plans to split Northern Rock into two by early next year, creating a healthy bank of retail deposits, mortgages and branches to be sold off to a third party and a so-called &ldquo;bad bank&rdquo; to wind down the loan book.<br /><br />Banking groups are already circling Northern Rock&rsquo;s healthy assets, with the Treasury understood to be keen to sell the newly-created entity off to a smaller group to increase competition in the sector.<br /><br />Virgin Money, led by former RBS banker Jayne-Anne Gadhia, which has applied to the FSA for a banking licence, yesterday confirmed it was interested in the Northern Rock sale.<br /><br />&ldquo;Virgin would look at buying whatever comes up,&rdquo; a spokesman told City A.M. &ldquo;Would we be interested in looking at buying up parts of nationalised banks? Yes. Would we be interested in buying Northern Rock? Yes.&rdquo;<br /><br />National Australia Bank, which owns Clydesdale and Yorkshire banks, is also said to be mulling an offer for the good bank. <br /><br />Tesco Bank has also been touted as a potential buyer for the good bank, although it has recently poured cold water on the idea.<br /><br />Industry insiders said the government would have no problems finding a buyer eventually.<br /><br />Under the carve-up plan, the Rock&rsquo;s &pound;18.5bn of customer deposits will be moved into BankCo, the &ldquo;good bank&rdquo;, as will?&pound;10bn of good mortgages and &pound;8.5bn in cash. <br /><br />AssetCo, or the &ldquo;bad bank&rdquo;, will be left with &pound;50bn worth of more risky mortgages and &pound;30bn of unsecured loans and Treasury assets. <br /><br />Around &pound;3bn of the government&rsquo;s &pound;15bn loan to Northern Rock will be converted into capital, with half of that going to BankCo, which will also get another &pound;8bn government loan to sell new mortgages. <br /><br />The EU is expected to place restrictions on the amount of mortgages BankCo can issue until the state aid has been repaid.<br /><br />Budenberg, who has worked in?UBS&rsquo; London offices since 1984, has previously advised the government on the bailouts of Northern Rock, Lloyds Banking Group and Royal Bank of Scotland. <br /><br />He will replace outgoing UKFI boss John Kingman, who is leaving to take a job in the private sector.