Northern Rock has halved its losses to £68.5m in the first half of the 2011 and has announced that it expects to begin trading profitably in the second half of 2012.
The £68.5m statutory loss compares to a £142.6m loss in the first half of 2011, a fall in losses of almost 52 per cent. The group made an underlying loss – which includes a gain on hedge fund volatility of £10.3m – of £78.8m in the first half of the year, compared to £140m loss in the same period in 2010.
Total income was £40.6m in the first half of 2011, compared with £28.5m in the first half of 2010. Gross lending was £1.5bn in the first half of the year, compared to £2bn in the first half of 2010. Net lending was down from £300m in 2010 to £900m in the first of 2011.
The bank, which is reporting its first results since the operational separation from Northern Rock Asset Management – also known as the ‘bad bank’, said the figures were in line with expectations. The company says it continues to prepare for a return to private ownership and to explore the option of a sale of Northern Rock.
Northern Rock executive chairman Ron Sandler says: “The trading environment remains challenging and there is strong competition in the savings and mortgage markets. We are carefully managing the product mix to sustain margins and improve income, and we continue to take steps to align the cost base with the income generating capacity of the company.
“We are working closely with UKFI and our advisers to explore the options for a sale of Northern Rock, at the right time and in the best interests of taxpayers. We are pleased with the level of interest we have received, and will continue to explore the sale option over the coming months.”