View more on these topics

B&B and Northern Rock repay £4bn but set aside £401m for customer redress

UK Asset Resolution, which manages bailed out lenders Bradford & Bingley and Northern Rock’s “bad bank”, repaid £4bn to taxpayers in 2012 but had to set aside £401m for customer redress over missold payment protection insurance and issues with customers’ loans paperwork.

UKAR’s full year results for 2012 show the company repaid £4bn to taxpayers in 2012, up 43 per cent from the £2.8bn it repaid in 2011.

Underlying pre-tax profit rose from £1.089bn to £1.097bn, but was hit by increased interest rate payments on Government loans.

Statutory pre-tax profit fell from £1.4bn to £690.5m due to UKAR buying back debt securities in 2011, and the £401m it has set aside this year for customer redress.

PPI misselling by Northern Rock has so far cost UKAR a total of £368m. UKAR has contacted around 150,000 customers who were sold PPI from 2005 onwards and compensated customers where they were missold. It says it has also uncovered 40 other “remediation issues” relating to the old Northern Rock mortgage book, with some customers receiving compensation as a result.

UKAR has also had to recalculate loans taken out by Northern Rock customers by £159m after mistakes were found in the documents and statements the banks sent to customers. The errors were identified when UKAR took full control of the Northern Rock mortgage book, known as Northern Rock Asset Management, when the systems were transferred from Northern Rock in 2012.

Adjusting customers’ balances to reflect the mistakes will cost NRAM around £271m in total.

Northern Rock was split in two in 2010, with the so-called “bad bank” Northern Rock Asset Management going to UKAR and holding residential mortgages, unsecured loans, and the Government loan; and Northern Rock plc which holds deposits and offers new mortgage lending. Virgin Money bought Northern Rock for £747m in November 2011.


Case study: The danger of breaching investment bond income rules

The problem: A client with a substantial amount invested in an investment bond wants to manage the withdrawals himself. What are the potential pitfalls. The answer: Life assurance bonds offer many useful features, including income tax deferral, the ability to withdraw up to 5 per cent of the premium each year, top slicing relief to […]


Yorkshire axes interest-only; HSBC scales back

Yorkshire Building Society has pulled out of the interest-only mortgage market and HSBC has restricted its offering to its Premier banking customers. Yorkshire will stop interest-only lending from 25 March. The change applies across all its lending brands including Barnsley Building Society, Chelsea Building Society, Norwich & Peterborough. Broker-facing brand Accord Mortgages will continue to […]

Out of Context

It’s a pleasure to join everyone tonight – a pleasure because, as a regulator, it’s nice to be asked out anywhere in the evening.” Financial Conduct Authority chief executive-designate Martin Wheatley addresses the Chartered Institute for Securities and Investment. “I often feel like I want to die.” The Lang Cat principal Mark Polson confuses an […]

Govt unveils tax break for return-to-work interventions

The Government is taking forward the recommendation from Dame Carol Black and David Frost’s independent review of sickness absence that tax relief should be offered for return-to-work interventions. The Budget also confirmed that the Government will abolish the Percentage Threshold Scheme and recycle funding into creating the Health and Work Assessment and Advisory Service for […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm