B&B “bad bank” pays off £1.6bn

UK Asset Resolution (UKAR), the holding company for defunct Bradford & Bingley and Northern Rock Asset Management, said it repaid £1.6bn to the Government during the six months to the end of September.

UKAR, a state-run “zombie bank” that does not take on new business, said it has now returned £12bn to the Government.

It owed 48.7bn when it was created in October 2010.

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UKAR, Britain’s seventh-largest mortgage lender, is winding down the loans of Northern Rock and Bradford & Bingley, which were nationalised during the financial crisis of 2007 to 2009.

Richard Banks, UKAR’s chief executive, said: “UKAR has continued to make good progress over the past six months, with a further £4.4bn reduction in our balance sheet during this period. It is pleasing that arrears continue to fall and we remain committed to working with our customers to help them plan for the future.”

Earlier this month the firm sold £2.7bn of performing mortgages to Commercial First, a consortium led by JP Morgan.

It said the sale would turn a £55m profit.

“The continued fair treatment of customers was a key consideration for UKAR in selecting the winning bid,” UKAR said earlier this month.

“The sale will not affect the terms and conditions of the mortgages in this portfolio and the 27,000 customers impacted will be contacted directly.”

The transfer of the mortgages to the Commercial First consortium will be phased over the next 12 months.