Northern Rock has just released its 2008 annual report and accounts.
It’s a spartan affair, devoid of pictures. But there are plenty of interesting tidbits on the nationalised mortgage lender — including for instance, compensation details, a log of board meetings over the course of the year, and results from a “Staff Engagement Survey” taken in the fourth quarter (result: over 90 per cent of respondents recognise “how important and central the customer is to Northern Rock’s business.”)
In terms of the actual financial results, however, the bank posted a £1.39bn net loss in 2008, up from a loss of £244m in 2007. The lender has also managed to pay back about £18bn of its £26.9bn government loan, while its deposit base had grown £9.2bn to £19.6bn by the end of 2008.
What struck us, however, was this detail on UK mortgages:
That’s a near five-fold increase in the number of mortgages in arrears, with the percentage of the total residential loan books rocketing to 2.92 per cent from 0.45 per cent in 2007. The UK average is circa 1.88 per cent, according to CML. At Northern Rock’s higher risk unit that percentage is even higher, with Together (the mortgages that allowed customers to borrow more than the value of their home and which was scrapped by Northern Rock last month) posting a 4.53 per cent arrears rate.
All of which makes Northern Rock’s decision move to lend out £14bn worth of new mortgages over the coming two years all the more interesting brave.
