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| Northern Rock makes hefty losses | Northern Rock makes hefty losses |
| (20 minutes later) | |
| Northern Rock has reported a loss of £724.2m for the first six months of 2009, compared with a loss of £585.4m in the first half of last year. | Northern Rock has reported a loss of £724.2m for the first six months of 2009, compared with a loss of £585.4m in the first half of last year. |
| The nationalised bank said that 3.92% of its mortgage loans were more than three months in arrears, well above the national average of 2.39%. | |
| It currently owes the government £10.9bn, but is waiting for European regulatory clearance for more funding. | It currently owes the government £10.9bn, but is waiting for European regulatory clearance for more funding. |
| Northern Rock was nationalised in February 2008. | Northern Rock was nationalised in February 2008. |
| It had to be bailed out by taxpayers in 2007 when its model of borrowing short-term funds from wholesale markets to lend to mortgage borrowers was hit by the credit crunch. | It had to be bailed out by taxpayers in 2007 when its model of borrowing short-term funds from wholesale markets to lend to mortgage borrowers was hit by the credit crunch. |
| It reported impairment losses from loans and advances of £602.2m for the first six months of the year, compared with £191.6m for the same period the year before. | It reported impairment losses from loans and advances of £602.2m for the first six months of the year, compared with £191.6m for the same period the year before. |
| Northern Rock is in the process of splitting itself into two companies, one of which will hold savers' money and be responsible for new lending, while the other will hold many of the existing loans and be responsible for paying back loans to the government. | Northern Rock is in the process of splitting itself into two companies, one of which will hold savers' money and be responsible for new lending, while the other will hold many of the existing loans and be responsible for paying back loans to the government. |
| Once the restructuring has been completed, the Treasury will provide additional funding if the European Commission agrees to allow the plan. | Once the restructuring has been completed, the Treasury will provide additional funding if the European Commission agrees to allow the plan. |
| Chief executive Gary Hoffman told reporters he was making "good progress" in discussions with the Commission and expects to receive clearance in the autumn. | Chief executive Gary Hoffman told reporters he was making "good progress" in discussions with the Commission and expects to receive clearance in the autumn. |
| Earlier in the year, Northern Rock announced a change to its strategy, which has meant that it has reduced the priority of repaying its loans to the government and instead has tried to increase the amount of money it is lending. | Earlier in the year, Northern Rock announced a change to its strategy, which has meant that it has reduced the priority of repaying its loans to the government and instead has tried to increase the amount of money it is lending. |
| But it has warned it is unlikely to meet its target of £5bn of new lending for this year and is more likely to hit a figure of £4bn. | But it has warned it is unlikely to meet its target of £5bn of new lending for this year and is more likely to hit a figure of £4bn. |
| Mr Hoffman said applications for its mortgages doubled in the second quarter of the year, compared with the first three months of the year. | Mr Hoffman said applications for its mortgages doubled in the second quarter of the year, compared with the first three months of the year. |