July 29 (Bloomberg) -- British taxpayers made a net profit of 339.8 million pounds ($554.7 million) in the first half of 2011 from the assets they still hold in Bradford & Bingley Plc and Northern Rock (Asset Management) Plc.
Bradford & Bingley’s net income for the six months to June 30 was 100.5 million pounds, according to government-owned bank U.K. Asset Resolution Ltd. The bank’s first-half 2010 result of 645.1 million pounds was boosted by one-time items. NRAM posted a 239.3 million pound profit, down from 358.8 million pounds in the same period last year.
“Our aim is to maximize value for the taxpayer and we have accelerated the repayment of government debt,” U.K. Asset Resolution Chief Executive Officer Richard Banks said in the statement. “We remain cautious about the future as there is continuing pressure on household finances.”
U.K. Asset Resolution was formed in October 2010, taking mortgages from Bradford & Bingley, which is closed to new customers, and some from nationalized lender Northern Rock Plc. The banks were taken over by the taxpayer in 2008 and now operate separately, under a single board and management structure. Northern Rock Plc operates as a separate company.
Costs at NRAM dropped 28 percent in the first six months, while loan impairment charges fell by 105.7 million pounds to 171.9 million pounds. The number of NRAM accounts more than three months in arrears rose 6 percent from the year end to 27,010, while at Bradford & Bingley the figure fell 16 percent to 10,956.
Both companies get low rate loans from taxpayers. The Treasury will take an additional 124 million pounds from Bradford & Bingley during the remainder of 2011 by raising the rate it charges the bank for funding, reducing future profit by the same amount, the statement said.
NRAM repaid 1 billion pounds of its loan, reducing the balance to 20.7 billion pounds at the half year. Bradford & Bingley’s balance was unchanged from December 2010 at 27 billion pounds.
U.K. Asset Resolution expects to pay back the majority of the government loans in the next 10 years, Banks said.
--Editors: Francis Harris, Jon Menon
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