UKAR repays Government almost £800m

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UK Asset Resolution, which manages the closed mortgage businesses of Bradford & Bingley and Northern Rock Asset Management, repaid the taxpayer nearly £800m in the first half of 2012.

UKAR, whose job is to maximise value for the taxpayer after the two banks were bailed out at the height of the banking crisis, also reported a fall in repossessions and mortgages in arrears.

Arrears have fallen by nine per cent to 30,222 cases since the start of 2012 while repossessions are down by 15 per cent to 3,871 homes.

UKAR’s chief executive Richard Banks said: “We have made strong progress in the first half with further repayments to the Government.

“Much of our focus is on helping those of our customers who are in financial difficulty and it is pleasing to see a further significant reduction in arrears levels despite the continued economic uncertainty and pressure on consumers’ finances.”

Underlying pre-tax profits for the first half of 2012 were £481.4m, down from £591.8m in the first half of 2012.

UKAR said the decline was due to the reducing balance sheet and an increase in interest on the group’s Government loans.

The balance sheet fell by £5.6bn to £89.6bn as UKAR winds down the mortgage book. This decline was partly offset by lower loan impairment charges resulting from the improvement in arrears.

Earlier this month UKAR sold £465m of Northern Rock Asset Management mortgages to Virgin Money, which will generate further repayments to the Government.

UKAR, which has 612,000 mortgage accounts, said 90 per cent of its mortgage loans continue to perform well, but a “significant” number of customers are finding it difficult to meet their repayments.

UKAR said it is working closely with these customers to find solutions and it has eased payments for 34,000 people over the past six months.