The Northern Rock and Bradford & Bingley “bad banks” have paid back a further £1.9bn to taxpayers this year as their profits rise on the back of improved mortgage arrears.
Results for UK Asset Resolution, which manages both stakes, show it has repaid £1.3bn-worth of Government loans in the six months to 30 June compared with £800m in the same period last year, plus nearly £600m in interest payments, tax and fees. The results show borrowers in three months’ mortgage arrears or more have reduced by 29 per cent to 21,332, or 3.7 per cent of the total, compared with 30,222 in H1 2012.
Pre-tax profits have also grown by 10 per cent to £529m this year, compared to £481.4m in H1 2012.
The bad bank was set up to wind down toxic loans in the failed lenders as the “good bank” part of Northern Rock was sold to Virgin Money for £747m earlier this year.
London & Country mortgage specialist David Hollingworth says: “The bad bank strategy has been successful and the question now is whether UKAR can continue to get people to move away and run the book down.”