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March 9, 2011    

Northern Rock reports £232m loss

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by Kay Murchie

Crisis-torn Northern Rock has today unveiled an underlying loss of £232.4 million for the 2010 year for its so-called “good“ bank.

Despite the loss, the Newcastle-based bank will pay more than £13 million in bonuses to its 4,000-strong workforce.

The bonus comes despite executive chairman Ron Sandler describing the losses as “disappointing”.

He comments: “2010 represented a year of significant restructuring for Northern Rock plc, as well as being its first full year of trading.”

Mr Sandler was appointed after chief executive, Gary Hoffman, stepped down late last year to join NBNK - the newly established banking institution.

Meanwhile, deposits were down from £19.5 billion at the start of 2010 to £16.7 billion, but this was attributed to the closure of its Guernsey based operation.

Northern Rock Asset Management (NRAM), the so-called bad bank, will report its results later this month.

Nationalised Northern Rock collapsed in the autumn of 2007 when savers staged a nationwide run on the bank.

This signalled the onset of the banking crisis and the Rock was subsequently nationalised in February 2008.

At the start of 2010, it was split into two divisions – a “good bank” of profitable assets and “bad bank” of toxic debts.

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