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Northern Rock Asset Management repaid £2bn to government in 2011

Northern Rock Asset Management paid back £2bn of its government loan in 2011, the results of its holding company UK Asset Resolution reveal.

The results, which also incorporate Bradford & Bingley, show NRAM has now paid back a total of £3.1bn since it was separated from Northern Rock plc.

B&B repaid £150m to the government in 2011.

UKAR paid a further £688m to the government in the form of interest, fees and corporation tax, resulting in overall payments of £2.8bn for the year, up from £1.6bn in 2010.

The firm’s underlying profit before tax more than doubled, from £444.1m in 2010 to £1.08bn in 2011.

It says the 145% increase in profit is down to an improved arrears performance, which resulted in lower loan impairment charges.

Mortgage accounts three months or more in arrears reduced by 14% to 33,216, down from 38,515 in 2010.

The total amount of arrears owed by customers has reduced from £273.6m at the end of 2010 to £233.9m at 31 December 2011.

However, the number of repossessed properties increased from 2,607 in 2010 to 2,705 at the end of 2011, a rise of 3.8%.

Underlying costs reduced by 21%, from £277.5m in 2010 to £220.6m in 2011.

Richard Banks, chief executive of UKAR, says: “We continue to make good progress against our objectives and made further significant repayments of the government loans.

“This improving performance is against a backdrop of challenging economic conditions and increasing hardship for some customers. Arrears and possessions are falling at B&B and we have stabilised the position with NRAM where arrears are now reducing due to our proactive approach.”


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