'Bad Bank' Pays Back £1.9bn To Taxpayers

The Government recoups more cash after the nationalisations of Northern Rock and Bradford & Bingley during the financial crisis.

The so-called 'bad bank' behind failed lenders Northern Rock and Bradford & Bingley paid another £1.9bn to taxpayers in the first half of the year and saw a sharp fall in soured loans.

UK Asset Resolution (UKAR), the state-owned firm responsible for winding down the mortgage books of the collapsed banks, said Government repayments surged more than 70% from £788m a year earlier.
Its underlying pre-tax profits increased 10% to £529m as the improving economy and housing market saw the number of borrowers in severe arrears drop 29%.
Repossessions fell more than 8% to 3,871 and charges for bad debts dived.
Chief executive Richard Banks said: "All that suggests that the economy is starting to improve and people's finances are starting to improve."
Britain's housing market has been stimulated in recent months by Government schemes that have boosted mortgage approvals and lifted prices.
In a separate report today, the lender Halifax said house prices increased at their fastest pace in almost three years in July - rising 4.6% on an annual basis, 0.9% month-on-month.
It pointed to increased market activity as the economy improved amid the assistance measures for buyers.
The Help to Buy initiative allows people to get on to the housing ladder with a 5% deposit, while Funding for Lending encourages banks and building societies to lend more to households and businesses.
Mr Banks added: "There are definite signs of a moderate recovery and the mortgage market has been stimulated through the Help to Buy scheme.
"I think it will be a continued steady reduction in the number of customers in arrears," he said.
UKAR has now repaid a total £6.6bn to the Government, but still owes another £42.1bn.
It expects to fully repay the state within the next 10 years - which would be 13 years after the company was formed to manage the loan books of B&B and Northern Rock after the former building societies failed during the financial crisis.
It is winding down a £66.1bn total loan book and has 584,000 customers, of whom around a third are on interest-only mortgages.