£49bn loan repaid in wake of Northern Rock, B&B

UK Asset Resolution (UKAR), the so-called “bad bank” set up in the UK to manage the debts of failed banks Northern Rock and Bradford & Bingley, said it has repaid the last of the £48.7 billion taxpayer loan made in the financial crisis.

UK Asset Resolution CEO Ian Hares said: “I am delighted that, in under ten years, we have been able to repay in full the government loan of £48.7 billion.

“The final payment followed the completion of the sale of the two NRAM (Northern Rock Asset Management) portfolios.

“In turn we’ve been able to reduce and simplify our balance sheet which is 94% smaller since formation.

“Looking forward, we are focussed on the disposal of the remaining government investments in NRAM and B&B whilst ensuring that customers are appropriately protected.”

UK Asset Resolution is owned by the UK’s Treasury.

UKAR said: “UK Asset Resolution Limited which incorporates Bradford & Bingley plc and NRAM Ltd today issues its results for the year ended 31 March 2019.

“UKAR’s mission is to maximise value for the taxpayer, whilst serving our customers well and treating all our stakeholders fairly.

“Since formation in 2010 UKAR has made significant progress and after the year end all outstanding B&B and NRAM Government loans from HM Treasury were repaid, enabling us to move to the final stage of achieving our overarching objective of disposing of the Government’s investments in both companies.”

UKAR also confirmed:

  • A balance sheet reduction of £8.4 billion to £11.4 billion following the sale of four asset portfolios.
  • In line with reducing mortgage balances, underlying profit before tax decreased by 42% to £340.1 million. Statutory profit before tax in the period was £340.3 million.
  • Total number of customers fell by 96,000 to 35,000 with lending balances down to £5.5 billion and more than 92% of these loans performing well.
  • Mortgage accounts three or more months in arrears, including possessions, reduced by 14%.

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