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Northern Rock makes £1.4bn loss Northern Rock makes £1.4bn loss
(30 minutes later)
Northern Rock has confirmed it made a loss of £1.4bn in 2008. Nationalised bank Northern Rock has confirmed that it made a loss of £1.4bn in 2008, but says it is making "good progress" against its objectives.
The bank also said it was ahead of target in repaying the £26.9bn loan from the government, having reduced the amount it owed by £18bn to £8.9bn. It also said home repossessions jumped by 63% last year, with the bank holding 3,620 properties by the end of 2008.
It also confirmed its plans to support government policy to increase mortgage lending, saying it would offer £14bn of new lending over the next two years. The bank said it was ahead of target in repaying the £26.9bn government loan, having cut the amount owed to £8.9bn.
"Northern Rock has made good progress against the business plan objectives laid out in March 2008," it said. It also confirmed its plans to increase mortgage lending, saying it would offer £14bn of lending in the next two years.
"Northern Rock has made good progress against the business plan objectives laid out in March 2008," said chief executive Gary Hoffman.
'Responsible lending''Responsible lending'
The move to increase lending - which was announced last month - marked a U-turn in Northern Rock's lending policy. While the 3,620 repossessed homes that Northern Rock held at the end of 2008 was up sharply from the 2,215 it held a year earlier, the total was lower than the 4,201 it held at 30 September 2008.
"Unfortunately, given the external economic backdrop it is likely that repossessions will continue to be a feature of the market over the coming year," said Mr Hoffman.
The move to increase mortgage lending - which was announced last month - marked a U-turn in Northern Rock's lending policy.
Since being nationalised in February 2008, the bank has sought to reduce its mortgage book - a policy which it says has helped it make good headway in repaying the government loan.Since being nationalised in February 2008, the bank has sought to reduce its mortgage book - a policy which it says has helped it make good headway in repaying the government loan.
New mortgage lending at the bank was about £2.9bn in 2008, compared with £29.5bn in 2007.New mortgage lending at the bank was about £2.9bn in 2008, compared with £29.5bn in 2007.
However, following consultations with the government, the bank will now increase its lending.However, following consultations with the government, the bank will now increase its lending.
"We can now return to what we do well - mortgage lending," said chief executive Gary Hoffman. "We can now return to what we do well - mortgage lending," said Mr Hoffman.
The bank's return to the mortgage market would be governed by focussing on "responsible lending", he added.The bank's return to the mortgage market would be governed by focussing on "responsible lending", he added.