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| Northern Rock reports reduced losses in first half | Northern Rock reports reduced losses in first half |
| (40 minutes later) | |
| Nationalised lender Northern Rock PLC has announced reduced losses for the first six months of the year. | Nationalised lender Northern Rock PLC has announced reduced losses for the first six months of the year. |
| The bank reported a pre-tax loss of £68.5m in the six months to 30 June, compared with a loss of £142.6m the previous year. | The bank reported a pre-tax loss of £68.5m in the six months to 30 June, compared with a loss of £142.6m the previous year. |
| Northern Rock PLC was created last year after the lender was split in two as a precursor to a sale. | |
| The deadline for bids ended last week, with Virgin and JC Flowers reportedly interested. | The deadline for bids ended last week, with Virgin and JC Flowers reportedly interested. |
| There have been no reported bids from building societies. At least two, Coventry and Yorkshire, have ruled themselves out of the bidding. | There have been no reported bids from building societies. At least two, Coventry and Yorkshire, have ruled themselves out of the bidding. |
| The second part of Northern Rock - Northern Rock Asset Management - holds the bank's more risky loans, some of which might not be paid back. It is not due to be sold. | |
| Sale | Sale |
| Northern Rock PLC said it expected to return to profit in 2012 and hoped to return to private ownership shortly. | Northern Rock PLC said it expected to return to profit in 2012 and hoped to return to private ownership shortly. |
| The bank, currently owned by UK Financial Investments, did not announce a precise timetable for the sale process. | The bank, currently owned by UK Financial Investments, did not announce a precise timetable for the sale process. |
| "We are pleased with the level of interest we have received and will continue to explore the sale option over the coming months," said the bank's financial statement. | "We are pleased with the level of interest we have received and will continue to explore the sale option over the coming months," said the bank's financial statement. |
| The bank said its reduced losses were the result of a rise in income from interest on loans - especially mortgages - and lower costs. | The bank said its reduced losses were the result of a rise in income from interest on loans - especially mortgages - and lower costs. |
| However, lending actually fell. Gross lending, including retention business, was £1.5bn in the six months to 30 June 2011, compared with £2bn the previous year. | However, lending actually fell. Gross lending, including retention business, was £1.5bn in the six months to 30 June 2011, compared with £2bn the previous year. |
| The bank said the retail environment remained tough and competitive - especially while bank interest rates remained low, limiting potential profits on loans. | The bank said the retail environment remained tough and competitive - especially while bank interest rates remained low, limiting potential profits on loans. |
| In March, the bank announced 680 job losses as part of its drive to reduce costs. | |
| In its statement, it said approximately half the employees had now left, with the remainder to leave during the second half of the year. | |
| "The environment remained challenging for a small, predominantly retail-funded, bank like Northern Rock," the bank said. | "The environment remained challenging for a small, predominantly retail-funded, bank like Northern Rock," the bank said. |