Rock pays £1bn back to state

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The "bad bank" that runs Northern Rock Asset Management (NRAM) and the rump of Bradford & Bingley has paid back another £1bn to the Government.

UK Asset Resolution said that the state-owned NRAM had now returned £2.1bn to taxpayers in 18 months, bringing its balance down to £20.7bn at the end of June. Bradford & Bingley still owes the Government £27bn.

The update came as NRAM revealed a surge in pre-tax profits in the six months to June to £344m, from £182m last year, while Bradford & Bingley reported profits of £152m from £83.6m.

The Government split Northern Rock in two at the start of last year, forming Northern Rock plc, which is up for sale, and NRAM, which houses the more toxic loans. B&B, whose savings business was sold to Santander, merged with NRAM shortly afterwards.

NRAM saw mortgage accounts that are three months or more in arrears increase by 6 per cent in the six months to June to 27,010, while B&B saw a fall of 16 per cent to 10,956. NRAM and B&B decreased costs by 28 per cent and 10 per cent respectively, while loan impairment charges also fell.