Key points of Northern Rock's business plan

LONDON (Reuters) - Embattled Northern Rock, taken into government ownership last month, has unveiled its long-awaited business strategy on Tuesday, including plans to halve its asset base and cut 2,000 jobs by 2011.

The following are highlights from the plan.

Key objectives:

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-- Northern Rock will contract to a "smaller, sustainable business" by halving asset base.

-- All forms of public support will be phased out over next three to four years, through repayment of the Bank of England loan and release of government guarantees.

-- Staffing levels to fall by around a third by 2011, with most of the job losses in the first year.

-- Risk management to be strengthened.

-- Northern Rock will ensure it does not use government support "to compete on unfair basis".

Commercial strategy:

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* Savings

-- Retail deposits to form larger share of funding

-- Branch network to be maintained

-- Market share of UK deposits to "increase slowly"

* Loans

-- Focus to be on prime residential mortgages

-- It will originate enough mortgages to replenish its Granite securitisation programme

-- It will have a smaller presence in intermediary market

-- It will withdraw from unsecured lending

* Overseas

-- It plans to close Danish savings operations in 2008

-- Savings operations in Ireland and Guernsey to be maintained

* Financing

-- It will seek further limited asset sales

-- It sees a "staged and cautious" return to wholesale financing market