UK ‘bad bank’ repays £3.8bn in first nine months of 2013

Britain’s “bad bank” that is running down the loans of two bailed out lenders said today it repaid £3.8 billion (€4.5 billion) to the government in the first nine months of 2013.

UK Asset Resolution (UKAR), a state-run ‘zombie bank’ that does not take on new business, said it had now returned £8.3 billion to the government. It owed £48.7 billion when it was created in October 2010.

UKAR, Britain's seventh-largest mortgage lender, is winding down the loans of Northern Rock and Bradford & Bingley, two of Britain's customer-owned building societies which were nationalised in the run-up to the 2008 financial crisis.

Chief Executive Richard Banks said UKAR had seen a continued reduction in arrears by working with customers in financial difficulty. Mortgage accounts that are three or more months in arrears have fallen by 26 per cent since the start of the year to 18,993.

UKAR said signs of recovery in the British economy were emerging, both in the wider economy and in the housing and mortgage markets. Its underlying pretax profit rose by 15 per cent during the period to £856 million. (Reuters)