UK Asset Resolution (UKAR) – Britain’s so called ‘bad bank’ – has set aside another £64 million to pay future successful claims on mis-sold PPI policies before the August 29th claims deadline.
The quango also confirmed it has finally paid off the last of the £48.7 billion bail-out cash used by the government at the height of the 2008 financial crisis to manage the failed debts of Northern Rock and Bradford & Bingley.
Both banks were effectively going bust when the Chancellor stepped in and nationalised them. The money-making divisions were sold off while the massive loan books were combined into a new entity specially set up to manage them going forward.
In common with the rest of the UK banking industry, the two banks had been mis-selling PPI before the financial crash and have been paying out on successful claims by consumers ever since.
In its annual report UKAR announced the extra £64 million was needed because it had underestimated the volume of claims from consumers trying to beat the deadline.
Commenting on the paying back of the bail-out cash, UKAR confirmed the final repayment was made in May after the successful sale of two Northern Rock Asset Management (NRAM) loan books.
Chief executive, Ian Hares, said: “I am delighted that, in under 10 years, we have been able to repay in full the government loan of £48.7 billion.
“Looking forward, we are focused on the disposal of the remaining Government investments in NRAM and B&B whilst ensuring that customers are appropriately protected.”
It still manages £5.5 billion in loans and accounts for customers, but expects to be able to offload them in 2020.
Its current balance sheet stands at £11.4 billion, down by £8.4 billion over the year and by more than £100 billion since 2010.