UKAR to make £60m investment on upgrade of group’s IT system

The investment should pay for itself within 18 months as the move is expected to reduce costs by some £40m a year.

At the end of this month UKAR is expected to announce it made a profit during 2010.

The company, which is continuing to replace staff when they leave, is currently advertising for a new investment director.

The vast majority – over 90 per cent – of UKAR’s customers are repaying their mortgages and loans in the normal way and both parts are profitable, although it has twice the average levels of arrears as non-bailed out rivals.

UKAR’s chief executive Richard Banks said: “Our overall objective is to have an orderly wind-down and repay Government debt while treating customers and creditors fairly. The strategic goal is to pay the £50bn Government debt, but it won’t happen very quickly.”

UKAR, which has its headquarters at Bradford & Bingley’s Crossflatts home in Bingley, has said there are no plans to bring the two mortgage books together.

While the first and foremost goal is to repay the taxpayer, there may be an opportunity for UKAR to have a life beyond that.

“If we can create an organisation that is very good at what it does and we facilitate full repayment of the Government debt, maybe we have an alternative future, ” said Mr Banks. “We could continue servicing mortgages, whether it’s new mortgages or mortgages we’ve already got.”