Northern Rock posts $334m loss



Northern Rock, the British government-owned bank, said it made a £168 million (Dh1.226 billion) loss last year, swinging almost £800m from its 2006 profit due to costs related to its funding crisis and higher losses on risky assets and home loans.


Britain's biggest casualty of the global credit crisis, which was nationalised last month after borrowing £27 billion in emergency funds from the Bank of England, said the business is expected to remain "significantly loss-making" in 2008. It plans to break even in 2011.


The bank said its BoE loan has dipped to £24bn and should be repaid by the end of 2010.


Northern Rock reported a statutory loss before tax of £168m in 2007, compared with a profit of £627m a year before.


It blamed the loss on costs related to a five-month strategic review, losses on risky assets whose value has been hit by financial market turmoil, and high bad debts on mortgages and unsecured loans as the housing market deteriorated. (Reuters)