Northern Rock posts £257m loss
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Nationalised bank Northern Rock has recorded a statutory loss of £257.5m for the year to December 31 2009, compared to a loss of £1.4bn in 2008.
The bank, which was split in two on January 1, lent £4.2bn in gross lending in 2009 including gross new residential lending of £3.1bn and £1.1 bn of retention lending.
In February 2009 Northern Rock changed its business plan from focussing on redeeming mortgages in order to pay back its government loan, to slowing down the rate of redemptions.
The bank also made a pledge to offer up to £14bn of new mortgage lending in 2009/2010, which Northern Rock says it is on target to meet.
The government loan to Northern Rock increased by £8.5bn to £22.8bn, following the bank’s restructure.
Two separate companies were created as part of the restructure - the existing company, Northern Rock Asset Management, and a new bank, Northern Rock plc.
Northern Rock Asset Management holds £49.7bn of residential mortgages and unsecured loans of £3.9bn, as well as the government loan.
It does not hold any retail deposits and does not offer any new mortgage lending.
The number of mortgages in more than three months arrears, including the infamous Together loans that offered LTVs of up to 125% was at 4.28% as at December 31 2009, up from 2.92% in December 2008 and higher than the Council of Mortgage Lenders industry average of 2.38%.
Excluding Together mortgages, the three-months arrears rate falls to 3.10%, while for Together secured mortgages on their own the rate jumps to 6.93%.
The number of properties in possession has fallen to 2,061, compared with 3,620 in December 2008.
Gary Hoffman, chief executive of Northern Rock, says: “It is over two years since Northern Rock entered public ownership.
“During that time the company has made good progress in pursuit of its objectives that include repayment of state aid, delivering value for taxpayers and ultimately a return to private ownership.
“We are looking forward, not back, and my colleagues across the business remain committed to delivering a high standard of service for all of our customers.”
Readers' comments (2)
Neil Cutmore | 10 Mar 2010 9:38 am
Who is Northern Rock trying to kid with these figures.
Its obvious all the bad debt is in Northern Rock Asset Management. Where's their P&L figures
Also arrears without Together mortgages is again another spin. Why dont they publish it with them. Because I'm sure many people with huge negative equity in a ludicrous and irresponsible offering simply handed back the keys and the figures would look awful.
Come on Northern Rock come clean and tell us whats really going on so at least we can advise clients of the consequences of irresponible lending when they ask for mortgages outside their affordablity. Not oh its all right worst case we'll clear it up in 2 years.
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Dave Green | 10 Mar 2010 10:21 am
Neil Cutmore said: "Also arrears without Together mortgages is again another spin. Why dont they publish it with them."
They did. Look at the next bit of the sentence in the article. Is this clear enough for you.
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