Business

Bradford & Bingley owner repays £4bn to taxpayers

B&B sign
Image caption Bradford & Bingley was nationalised after collapsing under a mountain of debt

UK Asset Resolution (UKAR), the government-owned company incorporating Northern Rock (Asset Management) and Bradford & Bingley, paid back £4bn to taxpayers in 2012.

Announcing its full-year results, UKAR said the £4bn repayment included £3.1bn of loan repayments and was up on the £2.8bn repaid in 2011.

It saw the number of mortgages three or more months in arrears fall by 23% to 25,581, the company said.

But it still owes the Treasury £43.4bn.

UKAR chairman Richard Pym said: "We still have a long way to go, but it remains our expectation and determination to repay that debt in full."

Statutory pre-tax profits fell to £690.5m for the year to 31 December 2012, compared with £1.375bn in 2011.

This was partly as a result of provisions made for compensation to customers who were mis-sold Payment Protection Insurance (PPI) and personal loans.

UKAR, which has 615,000 customers, most of them mortgage holders, said the cost of dealing with PPI claims was £130m in 2012, adding to the £238m from previous years, while an additional £271m was set aside to cover the mis-administration of personal loans.

The company said the outlook for 2013 was "somewhat more positive than a year ago, although the recovery remains weak by historic standards and pressure on many households' finances remains acute".

UKAR also said it sold £465m of residential mortgages to Virgin Money at full value during the year, while lending balances stood at £68.7bn, down from £75.3bn in 2011.

It was formed in 2010 to integrate the mortgage operations of Northern Rock Asset Management (NRAM) and Bradford & Bingley (B&B) following their nationalisation.

Northern Rock plc was sold to Virgin Money in 2011.

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