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B&B and Northern Rock Asset Management in profit

Both Bradford & Bingley and Northern Rock Asset Management returned a profit last year, compared to significant losses in 2009.

UK Asset Resolution, the holding company set up in October to manage B&B and NRAM, has announced that B&B posted an underlying pre-tax profit of £200.1m for the year to December 31, 2010. This is compared to a £166.5m loss in 2009.

NRAM was created when Northern Rock was split in two in January 2010. NRAM holds most of the pre-existing mortgage book, while Northern Rock plc holds the retail deposits and the remaining mortgage book.

NRAM has reported an underlying pre-tax profit of £277.4m for last year, compared with a loss £313.4m in 2009.

The results for Northern Rock’s so-called ’bad bank’ follow the news that Northern Rock plc made a £232.4m pre-tax loss in its first year of trading.

The number of arrears and repossessions at B&B have fallen over the year. As at the end of 2010 there were 13,096 B&B mortgages in arrears for three months or more including repossessions, down 32 per cent from the end of 2009.

At NRAM, the equivalent figure was 25,419, up 3 per cent from the previous year.

UKAR chairman Richard Pym (pictured) says: “UKAR has a complex task as we run down our £110bn balance sheet. In 2010 our management team has made good progress delivering our plans and looking forward we have the right strategies in place to deliver maximum value for the taxpayer.”

Directors’ remuneration has fallen over the year from £4.8m to £1.2m.

B&B’s retail branches and savings accounts were transferred to Santander in September 2008 at the height of the financial crisis, while B&B’s mortgage book was nationalised. It is permanently closed to new business but services around 250,000 existing borrowers.

Northern Rock was nationalised in February 2008 and was restructured in January 2010. It services around 600, existing borrowers, 400,000 of which are mortgage customers and 200,000 who are unsecured loan customers.

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