State-rescued Northern Rock bank halves losses
British bank Northern Rock, nationalised during the global financial crisis, said Wednesday that its losses halved in the first six months of 2011 and it expected to trade profitably next year.
The lender was last year split in two, forming a so-called "good bank" for its healthy businesses and a "bad bank" management company to wind down toxic assets.
The "good bank" -- Northern Rock Plc -- reported on Wednesday a pre-tax loss of £68.5 million (78.7 million euros, $114 million) for the six months to June compared with a year-earlier loss of £142.6 million.
Underlying losses stood at £78.8 million, down from £140 million.
"Northern Rock has made good progress in the first half of 2011," the bank's executive chairman Ron Sandler said in an earnings statement.
"The company continued to be loss-making, as expected, but losses are significantly reduced and we are generating momentum. The company expects to begin trading profitably during the second half of 2012."
Sandler added that the bank continued to explore options for a sale of Northern Rock as it looks to return to the private sector.
"In the meantime, it is business as usual. We remain focused on serving our customers, providing them with attractive products and a safe home for their savings and mortgages," he added.
Northern Rock collapsed in mid-September 2007 when the credit crunch forced it to seek emergency assistance from the Bank of England, sparking the first run on a British bank in recent history.
To prevent a wider system meltdown, the government agreed in December 2007 to guarantee all customer deposits held at the struggling group, before taking the lender over in early 2008.
© 2011 AFP