Losses reduced at Northern Rock

Northern Rock has today reported reduced losses for 2009 during what has been a very difficult period for the group having been nationalised after teetering on the brink of collapse. While underlying losses were reduced from over £1.2 billion in 2008 to £383 million in 2009 the company is by no means out of the woods as yet with loan write-offs set to remain high in 2010.

Encouragingly the company reported a profit in the second half of 2009 of £466 million against a loss of £724 million in the corresponding period of 2008. The company made provisions of £1 billion against its loan book in 2009 which compares with provisions of £894 million a year before. This will be the final year during which Northern Rock will be able to report like for like results because of the recent split into a "good bank" and a "bad bank". The "good bank" is being primed for sale by the UK government in an attempt to reduce tax liabilities in the medium to longer term.

These figures may well mark a turning point in the future of Northern Rock but the company will never be the same again having been the most high-profile victim of the credit crunch.