Northern Rock posts a £232m loss on its long road to recovery

STATE-OWNED lender Northern Rock yesterday said it made a loss of £232m last year.

In its first annual results since the government split the “good” part of the bank from its toxic assets last year, Northern Rock said it was hit by restructuring costs of £362.5m.

It was weighed down by a £59.9m exceptional expense relating to its separation and by charges of £33.2m for government funding guarantees.

Yet Northern Rock insisted it had made progress.

The lender said it had narrowed its underlying losses to £92.4m in the second half of the year, compared with an underlying loss of £140m in the first six months.

Executive chairman Ron Sandler said: “While it is always disappointing to report a loss, this in part reflects the high level of liquidity held, the costs incurred in relation to the government’s retail and wholesale guarantees, which have now been removed, and other exceptional costs incurred as the company was restructured.”

The state-backed bank also said it will pay £13.1m in bonuses to its staff.

It’s 4,500 employees – who earn an average annual salary of £20,000 – will share in the bonus, receiving up to £3,000 each.