Northern Rock shows losses of £585m

My Account
Logout

Create an Evening Standard Account

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Welcome! Sign in here

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Forgot your password ?

Registration

* indicates fields that are mandatory

Email *

Password *

Confirm Password *

First name *

Surname *

Postcode *

Country *

Mobile phone number

Username *

Gender *

Year of birth *

When you sign up...

You will have access to all our online competitions, discounted offers and can post comments on our site.

You will also receive The Weekender newsletter sent every Thursday - it’s full of fantastic offers and ideas for the weekend. You can update your email preferences in your account page when you log in.

Other newsletters and emails

Homes & Property Newsletter - Yes I want to receive the weekly email with all the latest news on property in the capital

Occasionally we would also like to send you relevant emails detailing specific offers either from ourselves or carefully selected partners. If you would prefer not to receive these then please tick the appropriate boxes below. We will never pass on your details.

I do not want to receive additional offers and information from the Evening Standard

I do not want to receive additional offers and information sent by Evening Standard on behalf of carefully selected partners

Terms and Conditions

* I have read, understood and agree to be bound by the terms and conditions of Evening Standard

Registration

Mail Sent for Registration Confirmation.

A confirmation email has been sent. Please activate your account by clicking on the activation link sent in your mail box.

The nationalised lender said it suffered a bad debt hit of £191.6 million during the six months to June 30 - more than three times last year's figure - while it sustained more than £130 million in restructuring costs and fees associated with its move into public ownership.

The proportion of Northern Rock's mortgage accounts more than three months in arrears at June 30 more than doubled during the six months to 1.18%, while the number of homes in possession jumped 67% to 3,710.

But Northern Rock's chairman Ron Sandler said the business repaid £9.4 billion of Bank of England loans during the period, taking the amount owed at the end of June down to £17.5 billion.

However, he warned of more challenging conditions ahead and said the Government had agreed a £3 billion move to bolster its balance sheet. It will involve the Treasury swapping some of the outstanding debt for shares.

Mr Sandler had already warned the bank would make "substantial" losses this year.

But the Government's loan repayments were "well ahead" of target, he said, and the lender remained on track to pay them all back by the end of 2010.

Mr Sandler said: "The external environment has deteriorated and the consequences of this for Northern Rock are increased credit losses."

He added: "While the losses reported today are likely to continue as the restructuring proceeds and as the credit environment remains difficult, I am confident that the foundations have been well laid for recovery and return in due course to private ownership."

Chancellor Alistair Darling also said the bank was facing a "very difficult time" in common with other banks around the world, but was repaying its debt.