Growth helps UK’s bad bank repay £1.9bn

Tim Wallace
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RISING house prices and the improving state of the economy helped increase profits at the so-called bad bank made up of the remains of Northern Rock and Bradford and Bingley, UK Asset Resolution said yesterday.

In the first half of the year UKAR repaid £1.9bn to the government, with underlying pre-tax profits jumping 10 per cent to £529m.

The agency benefited from a plunge in arrears – mortgage accounts three or more months in arrears fell 29 per cent on the year to 21,332.

As a result its loan impairment charge dropped £79.2m to £91.5m.

Total lending balances fell 8.5 per cent to £66.1bn, and UKAR is set for another boost as private equity group JC Flowers and debt recovery firm Marlin Financial buy £400m of unsecured personal loans from its books.

The repayment leaves UKAR with debts of £42.1bn to the government.