Northern Rock announces reduced losses

Northern Rock said it expects to make a profit during 2012 after reporting reduced half-year losses.

The lender reported underlying losses of £78.8m in the six months to June, compared with losses of £140m the previous year.

Northern Rock was nationalised in February 2008 after it collapsed amid the credit crisis, sparking the first run on a UK bank for 150 years.

The bank also confirmed it had received indicative offers from interested parties since Chancellor George Osborne announced in June his decision to put Northern Rock up for sale.

After its near-collapse, Northern Rock was split into a “good bank” comprising new mortgages and savings, and a “bad bank” holding its toxic assets.

The “good bank” is the part being sold, while the government continues to wind down and run off the “bad bank’s” toxic assets although these could also be sold to a private party.

The Northern Rock sale is being handled by Britain’s UKFI organisation, which was set up to manage the state’s holdings in banks bailed out during the crisis.

“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,” Northern Rock Chairman Ron Sandler said in a statement.

“We are pleased with the level of interest we have received, and will continue to explore the sale option over the coming months,” he added.

More on banking

• 
  

  Barclays profits fall sharply

  02 August 2011

• 
  

  HSBC to cut 30,000 jobs

  01 August 2011