Northern Rock reveals significant losses

By MoneyhighStreet Staff. Published on August 5, 2008 This post currently has no comments.

Troubled UK lender Northern Rock has revealed that it lost nearly £600 million in the first half of the year.

The lender, whose financial difficulties last year were one of the first signs the credit crunch had reached the UK, reported that it lost £585.4 million for the first half of the year.

It added that it would require a £3 billion injection of cash from the government to remain in business.

Worryingly, the lender also reported that it has seen the number of people falling into arrears on their mortgages double to 1.18 per cent of all loans.

Ron Sandler, executive chairman of the lender, commented: "The external environment has deteriorated and the consequences of this for Northern Rock are increased credit losses.

"Following a review in July of the company''s ongoing regulatory capital requirements, HM Treasury has committed to a significant strengthening of the company''s capital base."

Recently, it was reported that Royal Bank of Scotland could reveal pre-tax losses of £1.7 billion for the first half of the year.