Northern Rock chief Gary Hoffman says bank has turned corner
Mar 11 2010 The Journal
Mr Hoffman said it was possible the taxpayer would end up making a profit on the Rock, which was controversially nationalised in February, 2008.
“The Government invested £1.4bn in Northern Rock. I think it may get more than its money back, get its money back or make a small loss,” he said.
The bank revealed yesterday that the number of mortgage accounts in arrears rose in the first half of 2009 before stabilising. The number of accounts more than three months in arrears was 4.2% over the year, up from 2.92%.
However, there was a fall in the number of properties repossessed and the bank said it had managed to keep 1,700 customers in their homes.
Mr Hoffman told The Journal that the bank had initiated a range of new policies to achieve this, including working with homeowners for 15 months before moving to repossession and extending the period of loans to reduce the size of monthly repayments.
“In those cases where people really do want to get out of their homes, we work with them to try and help them sell the property rather than move to repossess it,” he revealed.
Mr Hoffman said that its policies were now recognised by debt advice agencies and charities – who have previously criticised the bank for its methods of dealing with repossessions – as among the best in the business. He recognised that in the past the “perception and to some extent the reality” of the Rock’s way of dealing with customers in difficulty had been different.
Unite national officer Rob MacGregor said last night the bonus payments to Rock staff were appropriate recognition for its upturn in performance.
“The improved financial results announced today are the direct result of the hard work and dedication of workforce, in particular the thousands of staff in the North East,” he said.
“These modest bonus payments allow them to make ends meet and pay their household bills, not to buy second homes or Ferraris, as is the case with bonuses for traders in the City of London.”
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