UK Asset Resolution Limited (‘UKAR’) which incorporates Bradford & Bingley plc (‘B&B’) and NRAM Ltd (‘NRAM’) today issues its interim results for the six months ended 30 September 2016 (‘H1 2016/17’). UKAR’s mission is to maximise value for the taxpayer, whilst serving our customers well and treating all our stakeholders fairly.

Key Strategic Developments

  • Outsourced the servicing of our customer loans to Computershare.
  • Completed the final stage of the sale of c.£13bn assets.
  • Repaid the outstanding liabilities under the Aire Valley securitisation programme, a major step in the simplification of the Balance Sheet.
  • Subsequently launched the first stage of asset sales that could ultimately enable the phased repayment of the Financial Services Compensation Scheme (‘FSCS’) loan.

Financial Highlights

  • Balance Sheet reduced by a further £6.4bn bringing the total reduction to £78.9bn (68%) since formation of UKAR in 2010.
  • Government loan repayments of £1.1bn, bringing total repayments to £21.4bn since UKAR was formed. 44% of the government loans have now been repaid.
  • Reflecting reducing mortgage balances, underlying profit before tax reduced by 34% to £401.5m.
  • Mortgage accounts three or more months in arrears, including possessions, have reduced by 12% bringing the total reduction to 86% since formation.

Ian Hares, Chief Executive, commented:

“In the first half, we finalised a major sale of assets and completed the outsourcing of our mortgage servicing operations providing stability of service to customers. We are now working on an asset sales programme that could ultimately lead to the phased repayment of the FSCS loan extended to Bradford & Bingley. This will be a significant step in the successful delivery of our strategic objectives.”

Media Contact:

Nick Cosgrove / Jonathan Glass
Tel: +44 20 7404 5959

Strategic Developments

The outsourcing relationship with Computershare Loan Services (‘CLS’) saw over 1,700 skilled colleagues transfer to CLS who now work on our behalf serving our customers and helping those in financial difficulty. We continue to have oversight of our customers via a strong governance structure and we are pleased to see that excellent service levels have been maintained following the transfer.

The final completion of the sale of £13bn of assets in July 2016 saw 113,000 customer loans move to the Landmark Mortgages or Whistletree brands. The National Audit Office report* into the sale concluded that the complex transaction was carried out professionally, within a tight timeframe and achieved value for money for the taxpayer.

In the period, B&B redeemed the notes outstanding under the Aire Valley securitisation programme. This achieved the twin objectives of simplifying the Balance Sheet and unencumbering £8.1bn of mortgage loans, which facilitates future asset sales. All legacy secured funding on the B&B and NRAM Balance Sheets has now been repaid.

Update on Performance

Since formation in October 2010, the UKAR Balance Sheet has reduced by £78.9bn, including £37.9bn of customer loan repayments and £15.4bn of asset sales, which have facilitated the repayment of £57.4bn of wholesale funding and £21.4bn of government funding. In the six months to 30 September 2016 the Balance Sheet reduced by a further £6.4bn (H1 2015/16: £8.5bn) including the repayment of £1.1bn of government funding (H1 2015/16: £0.5bn). As at 30 September 2016 lending balances stood at £33.1bn (FY 2015/16: £35.5bn).

Reflecting the progress in shrinking the Balance Sheet, underlying profit before tax for the six months is £401.5m, a decrease of £210.6m from September 2015 (H1 2015/16: £612.1m).

Administrative expenses for the six months were 5% lower than the equivalent period in 2015/16 at £85.7m (H1 2015/16: £89.8m).

Statutory profit reduced to £480.4m from £856.9m reflecting the declining mortgage book and the prior year release of a £268.3m customer remediation provision, partly offset by the recovery of £50.0m from insurers in relation to remediation losses incurred by NRAM in 2012.

The number of mortgage accounts three or more months in arrears, including those in possession, reduced by 12% from 6,377 to 5,629 as at 30 September 2016. This was driven by underlying performance (472) and asset sales (276). The total value of arrears owed by customers has fallen by £7.1m to £42.2m, a reduction of 14.4%. This reduction is a direct consequence of proactive arrears management and the sale of assets coupled with the continued low interest rate environment.

The total number of customers continues to fall in line with our objective to reduce our Balance Sheet. In total UKAR has 215,000 customers (H1 2015/16: 366,000), with 273,000 mortgage accounts (H1 2015/16: 429,000) and 38,000 unsecured personal loan accounts (H1 2015/16: 98,000). The majority of these loans continue to perform well with more than 95% of mortgage customers up to date with their monthly payments.


*The NAO report on ‘The £13 billion sale of former Northern Rock assets’ can be located at:

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