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Northern Rock reports £724.2m loss

Northern Rock has seen a pre-tax loss of £724.2m in the six months to June 30, 2009, compared to a loss of £585.4m for the same period last year.

Mortgages more than three months in arrears have risen to 3.9 per cent, up from 1.18 per cent in the first half of last year.

Excluding Together loans, residential mortgage accounts over three months in arrears are 2.85 per cent.

New lending is down from an expected £5bn to just £4bn, which Northern Rock says reflects its “constrained capital position” prior to completion of the legal and capital restructure.

It says once the restructure and capital injection has been completed new lending will increase.

Northern Rock now owes the Government £14.5bn in loans, after increasing net borrowings to £10.9bn, compared to £8.9bn at the end of 2008. In the first half of last year Northern Rock owed the Government £17.5bn.

Retail deposits dropped to £18.4bn at June 30, 2009 down from £19.6bn at the end of last year, but up from £14.2bn for the same period last year.

Northern Rock chief executive Gary Hoffman says: “The current environment continues to be challenging however against this backdrop Northern Rock is making progress against its revised plan and has delivered results in line with expectations.

“We anticipate receiving State aid approval in the Autumn and the legal and capital restructuring of the company to be completed by the end of the year. This ultimately prepares for a return to the private sector.”

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