Northern Rock reports £724.2 million loss

Tuesday 4th August 2009

Northern Rock, the government-owned bank, has reported half-year losses of £724.2 million.

The loss for the first six months of this year compares with a loss of £585.4m for the same period last year, up 24 per cent.

The bank said the total value of all of its loans had fallen by £602.2m in the first six months of the year.

The bank, which was nationalised in February 2008, said 3.92 per cent of its mortgage loans were more than three month in arrears. The national average is 2.39 per cent, according to the Council of Mortgage Lenders (CML).

Northern Rock is currently in the process of splitting into two companies, one for savers' and for lending, and one for existing loans and paying back government loans.

The company currently owes the government £10.9 billion. It was originally given £26.9 billion in emergency funding at the very beginning of the banking crisis.

The scale of the financial crisis which faced Northern Rock was instigated by 'Together' loans, which provided homeowners with a 125 per cent mortgage.

Gary Hoffman, chief executive of Northern Rock, said: "The current environment continues to be challenging. However, against this backdrop Northern Rock is making progress against its revised plan and has delivered results in line with expectations."

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