UK Asset Resolution Limited sees profits rise by 10%

The group that manages the so-called "bad bank" assets of state-owned Northern Rock and Bradford & Bingley saw profit rise by 10% to £529m over the first six months of this year

UKAR chief executive Richard Banks
UKAR chief executive Richard Banks

The group that manages the so-called "bad bank" assets of state-owned Northern Rock and Bradford & Bingley saw profit rise by 10% to £529m over the first six months of this year.

UK Asset Resolution Limited (UKAR) also made payments of £1.9m to the taxpayer, including £1.3bn of Government loan repayments, results for the six months ending June 30 show.

Mortgage accounts three or more months in arrears, including possessions, meanwhile, dropped 17% to 21,332.

UKAR chief executive Richard Banks said: “I think overall these are good results and they continue to show the downward trend in arrears.

“Interest rates have been at an all-time low, but there remain concern some customers will have difficulties once they start to rise again.

“The whole focus now is on horizon gazing, if you like – identifying those customers who may struggle.”

UKAR was established as a holding company on October 1, 2010.

A report accompanying the latest results says the group had reduced its costs through transferring IT to a new supplier and closing its site in Gosforth, Newcastle, to concentrate on operations at Doxford Park, Sunderland, where it employs around 1,000 people and Bingley, West Yorkshire, where around 1,300 people are based.

More than 90% of its mortgage customers were up-to-date with payments at the time of the report and the company was working with those who were struggling.

The report continues: “A further area of focus for UKAR is whether our interest-only customers have plans in place to repay their mortgage at the end of their term.

“During the first half of 2013, we have proactively written to or called 18,000 interest-only customers.”

PPI claims had reduced, and, as well as ordering an independent external review into non-compliant Consumer Credit Act loans, the company had contacted and corrected the accounts of 120,000 customers.

As to the long term, Banks said: “We expect to repay all Government loans – or most of them – within the next 10 years.

“We cannot say exactly when because there are so many variables, but we will repay the Government loans and the creditors in full.”

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