Northern Rock bad bank returns to profit
Northern Rock Asset Management (NRAM), the so-called bad bank, returned to profit in 2010, it was reported today.
The crisis-torn bank, which was the first victim of the credit crunch, said pre-tax profits for the 2010 year were £200.1 million, against a £166.5 million loss in 2009.
At the start of 2010, Northern Rock was split into two divisions – a “good bank” of profitable assets and “bad bank” of toxic debts.
Last month, its so-called “good bank” reported an underlying loss of £232.4 million for the 2010 year.
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.
Last month, the bank announced it will reduce headcount by a further 680 as part of another restructure.
The lender said the job losses are necessary as part of a cost-cutting exercise and would affect employees “at all grades across the company”.
Less than 2,000 people will work for the bank following the latest job cull – compared to a workforce of 6,500 prior to its bailout in 2008.