Northern Rock announces £585.4m losses

Northern Rock today announced losses of £585.4m (€738m) for the first half of this year as the number of customers falling behind with mortgage payments jumped sharply.

The recently-nationalised lender said its bad debts provision stood at £351.8m (€443m) as 1.18% of its mortgage book slipped to more than three months in arrears at June 30 – more than double the amount at the end of 2007.

But the former bank said it had managed to repay £9.4bn (€11.8bn) of the Bank of England loans, taking the amount owed at the end of June down to £17.5bn (€22bn).

Northern Rock’s executive chairman Ron Sandler said: “The external environment has deteriorated and the consequences of this for Northern Rock are increased credit losses.”