Northern Rock made a loss of £167.6m for the full year 2007 – and handed chief executive Adam Applegarth a £785,000 severance pay-off.
The figures are revealed in the bank’s full year results for 2007, published this morning, which also show the bank plans to repay its £28bn state loan by 2010.
The report also reveals the bank plans to change its funding ratio, to 50% from retail deposits and 50% from non-retail funding over the next three to four years.
In the report Ron Sandler, executive chairman of NR, says: “This last year has undoubtedly been unsettling for our customers and I wish to thank them for the loyalty and patience they have shown.
“We recognise that customer support is of the utmost importance to our business and we remain fully committed to high service standards and fair treatment of our customers.”
The bank’s gross residential lending reached just under £29.5bn in 2007 – an increase on the 2006 figure of £28.9bn.
Its net residential lending fell to £13.3bn from £15bn in 2006.
The results statement says: “In the second half of 2007 our residential and unsecured lending volumes reduced reflecting funding conditions. This resulted in negative net lending in the fourth quarter of 2007.
Vince Cable, shadow chancellor for the Liberal Democrats, criticised the payout to Applegarth.
He says: “It is outrageous that someone who brought the bank to the brink of destruction and subjected taxpayers to liabilities worth billions of pounds, should be rewarded for failure.”