Nationalised UK lender Northern Rock
narrowed its losses to £257.4m ($383m) in fiscal 2009 from a
deficit of £1.36bn the previous year, despite a 23% increase in
loan impairments to £1.1bn.

The results represented the failed lender’s
last consolidated earnings following its division on 1 January into
two parts: a small retail bank incorporating £19.5bn of retail
deposits and £10bn of mortgages and a so-called ‘bad bank’
containing £50bn of riskier assets including mortgage loans.

Northern Rock said the ‘good bank’ unit will
ramp up retail lending during 2010 to around £9bn compared with
£4bn in 2009.

The bank’s chief executive Gary Hoffman said he
had held informal discussions with a number of companies interested
in acquiring its ‘good bank’ arm but insisted the UK government had
not set any deadline for a sale.

Northern Rock repaid £1.3bn of its £22bn UK
government loan in the past year and expects to repay half of the
outstanding balance in the next five years.

He added that Northern Rock had “turned a
corner and is facing forward” but he admitted it could take up to
20 years to repay the loan in full.