NORTHERN Rock today announced it was £232.4m in the red but said it cut its losses during the second half of the year.

The state-owned bank today published the first set of annual results for Northern Rock plc - the ‘good’ bank which the Government plans to sell back to the private sector.

But there was no hint in today’s statement when that sale might happen. The Rock would only say the sell-off would be when “conditions are right to do so, in the best interests of taxpayers”.

The Rock had been expected to make a loss but that loss fell from £140m in the first half of last year to £92.4m in the second six months of 2010.

Executive chairman Ron Sandler said: "Financial performance was in line with expectations in 2010. While it is always disappointing to report a loss, this in part reflects the high level of liquidity held, the costs incurred in relation to the Government’s retail and wholesale guarantees, which have now been removed, and other exceptional costs incurred as the company was restructured. 

“It remains a difficult trading environment for a small bank dependent on retail funding, with a combination of low interest rates, subdued mortgage market demand and high competition for retail savings.

“However, 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.

“We continue to work closely with UKFI on the strategic options for returning the company to private ownership, in the best interests of taxpayers, and we will provide a further update in this regard in due course.”