Northern Rock announces further losses
UK bank Northern Rock, this week announced that it had made larger than expected losses due to mortgage borrowers not being able to repay loans. The bank which was nationalised by the government in February after financial problems, made a loss of £585.4 million during the first six months of 2008.
Most of the losses were put down to the sharp rise in borrowers struggling to repay mortgages and an increase of repossessions last year. It’s not all doom and gloom though, Northern Rock did manage to repay over £9bn from a loan given to them from the Bank of England. This reduces the total amount to be repaid to £17.5bn.
Northern Rock is another in a long line of banks that have been hit hard by the credit crunch, and now plans to scale down its business by cutting 1,300 jobs and restructuring the business.