Northern Rock reveals £232m losses
Nationalised lender Northern Rock is paying staff £13.1 million in bonuses for 2010 despite posting a multimillion-pound loss for the year.
Most of the bank's 4,500 staff, who on average earn £25,000 a year, will receive a payout of around 10% of their salary. Executive chairman Ron Sandler, who is paid £250,000 a year, is not eligible for a 2010 bonus.
The payout came as Northern Rock recorded pre-tax losses of £232.4 million in 2010, but narrowed losses in the second half of the year to £92.4 million, compared to £140 million in the first six months.
The bank said it continued to work closely with UK Financial Investments (UKFI), the body charged with overseeing the Government's banking assets, to return the company to private ownership.
Northern Rock was nationalised in February 2008 after it collapsed amid the credit crisis, sparking the first run on a UK bank for 150 years.
The Government split Northern Rock in two at the start of last year, forming a mortgage and savings bank called Northern Rock plc and Northern Rock Asset Management to house the more toxic loans. The Government's 100% guarantee for Northern Rock deposits was removed last year.
Executive chairman Mr Sandler said the annual loss was "disappointing" but the bank was making progress.
He said: "The underlying loss incurred in the second half of the year was lower than in the first half, demonstrating that progress is being made, and I am confident that the company is on the right trajectory to profitability."
Mr Sandler would not give any indication as to when the bank hopes to return to profit. He said: "We're not making profit forecasts. We're on the right trajectory to return to profitability."
David Fleming, national officer at union Unite, said: "While Northern Rock appears to be making slow progress the figures today have come at a heavy price. With over 2,500 staff having paid with their jobs for the scandalous behaviour of the previous management, this gradual recovery is not enough."