Northern Rock are making progress towards repaying the Government. The bank was split into two “Good Bank” (Northern Rock Plc) “Bad Bank” (Northern Rock Asset Management)…a little be simplistic but basically that’s what has happened. The “bad bank” is the one that is heavily in debt to the Government at last count, something in the region of £22.5bn. This is expected to be merged with Bradford & Bingley in an attempt to keep bad apples together.
The “good bank” today announced a half year loss of £140m to 30 June 2010. This is in-line with expectations (yes, you may ask who?). The “bad bank” ironically announed pre-tax profits of a nearly £350m which is a considerable improvement and paid £300m to the Government reducing its debt to £22.5bn. So at the current rate of repayment, that’s about 75 years at £300m a year assuming no inflation or interest.
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