The 'bad' part of Britain's bailed-out bank Northern Rock said on Friday it repaid £2.0 billion (2.4 billion euros, $3.2 billion) of government loans last year. However it still owes the British state £19.7 billion, said UK Asset Resolution (UKAR), the government body overseeing the running down of Northern Rock's bad bank.
"We continue to make good progress against our objectives and made further significant repayments of the government loans," UKAR chief executive Richard Banks said in a statement.
"This improving performance is against a backdrop of challenging economic conditions and increasing hardship for some customers." UKAR added that the bad bank posted surging underlying pre-tax profits of £789.9 million in 2011, up from £191.3 million in 2010. Nationalised at the height of the global financial crisis in 2008, Northern Rock was later split in two. The 'good' part was sold to Richard Branson's Virgin Money at the end of last year and at a loss for taxpayers.
Britain's coalition government agreed to sell it to the former online lender for £747 million in cash, rising to a potential £1.0 billion. Northern Rock was plunged into crisis in late 2007 when its exposure to the credit crunch forced it to seek emergency assistance from the Bank of England and government, sparking the first run on a British bank in recent history.
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