‘Bad bank’ closes in on paying back taxpayers

The UK’s “bad bank” on Thursday edged closer to clearing its debts to the taxpayer a decade after the financial crisis as it repaid another £6.3 billion in Government loans.

UK Asset Resolution handles the former Bradford & Bingley mortgage book as well as Northern Rock Asset Management, the part of the failed bank not bought by Virgin Money in the wake of its state bailout.

The latest repayments, aided by sales of loans to Rothesay Life and a Barclays-led consortium, means UKAR has now repaid £44.7 billion, or 92% of the Government support. The balance sheet has shrunk by over £100 billion since 2010.

Chief executive Ian Hares, close to finishing the job, is looking at selling off the remainder “if possible through a sale of the NRAM and B&B legal entities”.

That would leave UKAR as a much smaller concern, managing elements such as the two banks’ pension liabilities.

“We need to satisfy ourselves... that the options we choose represent value for money for the taxpayer,” he said.

Pre-tax profits for the six months to September 30 fell 22% to £186.4 million, reflecting the smaller size of its loan book.