'Bad banks' give back £2.2bn

Northern Rock and B&B still owe £47bn but 'aim is to repay it and make a profit for taxpayer'

The "bad bank" parts of Northern Rock and Bradford & Bingley paid £2.15bn back to the taxpayer last year. But that still leaves the banks, which were merged as UK Asset Resolution (UKAR), with an outstanding £46.6bn owed to the Treasury.

"Our aim is to repay all that debt – to repay it and make a profit for the taxpayer," said Richard Banks, the chief executive. "We are well on course to do that having met or exceeded all our financial targets in the last year."

UKAR – which no longer does any new business but still holds more than 700,000 of what were deemed to be the most risky home loans in Northern Rock and Bradford & Bingley after they were nationalised – made a profit of £1.1bn in 2011 up from £444m.

It also paid £688m to the Government in interest, fees and corporation tax last year. In August, the Treasury raised the interest rate on part of its loans from 1.5 per cent above base rate to 5 per cent above, which will increase the interest paid in a full year by £250m.

Mr Banks said it was acceptable that the mortgage lender was "paying a more commercial rate of interest". Mr Banks added that he still expected to have paid back the vast majority of the taxpayer loans within 10 to 12 years.

UKFI, the body that holds the taxpayer stakes in the bailed-out and nationalised banks, this week said it expects the Treasury ultimately to receive between £95bn and £97bn from the sale of Northern Rock to Virgin Money and the run-off of the two "bad banks".

That is against the total of £64bn of taxpayer money pumped into them. Mr Banks said he was also pleased the number of customers who have missed three months' mortgage payments or more had fallen 14 per cent in the last year to 33,216.

He said: "Obviously low interest rates are a good thing for my customers and this business. But they are all facing increases in the cost of living which puts pressure on their ability to make mortgage payments." Mr Banks also revealed that he is now in a position to sell on portfolios of mortgages to banks or other financial institutions.

But he said: "We have received plenty of approaches but none which we would regard as sensible. Someone who is offering us 50p in the pound doesn't make sense when we are meant to be maximising the return to the taxpayer."

Northern Rock was nationalised in February 2008. Bradford and Bingley was carved up in September that year, with Santander buying the branch network and savings business and the mortgage book being nationalised.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003