Pre-tax profits at Northern Rock Asset Management (NRAM) rose to £790m, more than four times the 2010 figure of £191.3m, while the business paid back £2bn of the government loan it received, pushing the total it’s repaid up to £3.1bn. Admittedly, it still owes a cool £19.7bn, while the Bradford & Bingley side has only managed to scrape together £150m. Although to be fair, where Government money is concerned, every little helps.
Between them, the two banks have 722,000 customers, and even thought it was a tough year, the number of customers in mortgage arrears dropped by 14% to 33,216 (helped, no doubt, by record low interest rates). That pushed the banks’ total amount of arrears down by £39.7m on the year before, to £233.9m. Good going – although a certain amount of that is to be expected as the number of loans it holds falls. NRAM, for instance, managed to reduce its mortgage book to £38.4bn, from £44.15bn in 2010.
UKAR’s job now is to wind down the two banks as quickly – and as profitably – as possible. The signs are that it’s going well: costs at the lender fell by 21% in £220.6m, while it made another £382.3m from the buyback of £1.2bn of capital instruments. And earlier this week, UKFI, the body responsible for managing the Government’s investments, predicted taxpayers will make returns of up to £48bn on the rescue of Northern Rock.
So you can see why UKAR chairman Richard Pym is optimistic. ‘Our people have done a good job of integrating the operations of B&B and NRAM and have made sure we have the right strategies in place to… deliver maximum value for the taxpayer,’ he enthused.
That should be enough to keep the pitchfork-waving masses at bay, then. Which is more than can be said for Lloyds (also partially taxpayer-owned): the bank has apparently offered new CFO, former RSA CFO George Culmer, a signing-on package of £5.9m. That includes a £1.9m ‘golden hello’, a short-term bonus of up to £1.44m, a long-term bonus of £1.62m, a salaray of £720,000 and a pension of £180,000. Wowza.