Generally a poor set of results from Northern Rock on Thursday, encapsulated really by the bank’s statement that it will be “substantially loss making” for the duration of the year. Of course, the government is now running Northern Rock as part of the economic stimulus package as much as it is running it back to rude health as a viable private concern.
The trading statement in full is available here.
One thing we can’t quite square in our heads though was this par:
Northern Rock has continued to reduce the gross loan outstanding to the Government to £14.6 billion at 31 March 2009 (31 December 2008: £15.6 billion). Liquidity balances held with the Bank of England (excluding collateral balances) have reduced from £6.7 billion to £4.8 billion following the planned repayment of wholesale debt maturing in the first quarter. After the deduction of these balances, the net amount outstanding to the Government at 31 March 2009 was £9.8 billion (31 December 2008: £8.9 billion).
We assume hat the “liquidity balances” at the BoE refers to reserves held at the central bank’s behest to keep liquidity sound and enable Rock to adequately fund maturing debt.