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Northern Rock announces £585m losses
Aug 5 2008 LDP Business
NORTHERN Rock today announced losses of £585.4 million for the first half of this year as the number of customers falling behind with mortgage payments jumped sharply.
The recently-nationalised lender said its bad debts provision stood at £351.8 million as 1.18% of its mortgage book slipped to more than three months in arrears at June 30 - more than double the amount at the end of 2007.
But the former bank said it had managed to repay £9.4 billion of the Bank of England loans, taking the amount owed at the end of June down to £17.5 billion.
Northern Rock’s executive chairman Ron Sandler said: “The external environment has deteriorated and the consequences of this for Northern Rock are increased credit losses.”
Northern Rock said the number of properties in its possession jumped from 2,215 at the start of the year to 3,710 at the end of June.
In a further sign of customers finding it harder to make ends meet, the lender also said it was increasing staff numbers in debt management from 185 to around 500.
Before running into funding problems last summer, Northern Rock was one of the UK’s biggest and most aggressive mortgage providers, advancing loans worth as much as 125% of home values.
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