Northern Rock makes hefty losses
04 August 2009
Losses at nationalised bank Northern Rock have grown by 24% amid mounting losses on its mortgage loans.
Losses at the bank totalled £724.2m in the first six months of 2009, compared with £585.4m in the first half of 2008.
The Newcastle-based lender said that 3.92% of its mortgage loans were more than three months in arrears, well above the national average of 2.39%.
The first bank to seek emergency aid, it was nationalised in February 2008, and owes the government £10.9bn.
It had to be bailed out by taxpayers in 2007, when its model of borrowing short-term funds from wholesale markets to lend to mortgage borrowers was hit by the credit crunch.
Taxpayers are currently nursing a pretty hefty loss on their ownership of the Rock
Robert Peston, BBC business editor
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BBC business editor Robert Peston said that there were tentative signs that Northern Rock may be over the worst.
But he added that its mortgages were continuing to go bad at an alarming rate and at a faster rate than most of its rivals.
The bank said the total value of all of its loans had fallen by £602.2m in the first six months of the year. source: bbc.com