A CROSSFLATTS-based state-owned bank has announced its full year of results, including a reduced pre-tax profit of £346.9million, down from £1.1bn

UK Asset Resolution (UKAR), the state-owned bank behind failed lenders Bradford & Bingley and Northern Rock, reduced its balance sheet by a further £9 billion during the 2016/17 financial year. This brings the total reduction over the last seven years to £81.5bn.

UKAR was set up in October 2010 to facilitate the orderly management of the closed mortgage books of both Bradford & Bingley and Northern Rock Asset Management’s (NRAM.), a British asset holding and management company which was split away from the Northern Rock bank.

UKAR now has a workforce of 175 people and is responsible for around 148,000 borrowers holding £19.5bn of mortgages and loans.

Its results also showed a number of high-profile deals in 2016-17, including the disposal of former Bradford & Bingley loans to UK insurer Prudential and US private equity firm Blackstone for £11.8bn in March.

The loans, which are mostly buy-to-let mortgages still being repaid by borrowers, were part of one of the largest government asset sales in Europe.This saw the lending balances reduced overall by 45 per cent in the year to £19.5bn. UKAR Corporate Services Limited (UKARcs), a subsidiary business of UKAR, is responsible for the administration of the Government’s Help to Buy Mortgage Guarantee Scheme and Help to Buy ISA Scheme on behalf of HM Treasury.

During the 2016/17 financial year, UKAR also had net government loan repayments of £3.3bn,which brought total repayments to £23.7bn since it was formed. This means 49 per cent of the government loans have now been repaid.

Ian Hares, UKAR chief executive, hailed the company’s results and said its work could be completed by the early 2020s.

He said: “I am pleased with the progress made during the year.

“In the first half of the year, we completed the transfer of our mortgage servicing operations to Computershare, ensuring continuity of service for customers.

“When you look at the balance sheet when UKAR was created it was £116.5bn, we are down to just over £20bn. We are a long way down.

“We are a lot nearer the end than the beginning of our work.

“We also repaid all outstanding secured funding on the B&B and NRAM Balance Sheets, enabling further asset sales, and in March we agreed the first phase of a programme to repay the FSCS loan extended to B&B.

“These actions are major steps towards realising our objective of reducing the Balance Sheet while continuing to maximise value for the taxpayer.”