Rock suffers on bad debts

NATIONALISED mortgage lender Northern Rock posted a &pound;724.2m first-half loss yesterday, as the number of bad debts trebled.<br /><br />The bank, taken into public ownership in February last year, wrote down &pound;602.2m in bad loans, up 214 per cent on the &pound;191.6m in writedowns it took in the first half of 2008.<br /><br />The outlook for the rest of the year was unlikely to improve, the bank said, adding that the percentage of mortgages in arrears had reached 3.92 per cent by 30 June, compared to 3.67 per cent at the end of March.<br /><br />Chief executive Gary Hoffman said the bank lay at the mercy of economic conditions.<br /><br />&ldquo;Unemployment is the big unknown and whether we&rsquo;ve reached the bottom of the housing market,&rdquo; he said.<br /><br />There were signs of a positive trend for the bank, chaired by Ron Sandler, which narrowed its 2008 second-half loss of &pound;771m.<br /><br />Hoffman scotched suggestions that the Rock would be sold as soon as possible, saying that no timetable had been agreed. But Conservative shadow chief secretary to the Treasury Philip Hammond said: &ldquo;The government must not succumb to the temptation of a politically motivated quick sale at a knock-down price.&rdquo;