Rock will pay £27bn loan by 2011
Northern Rock will pay back the £26.9bn it borrowed from UK taxpayers by the end of 2010 and post a profit in 2011, the government-owned lender promised today.
Around £7bn of the Bank of England loan will paid by the end of 2008, said executive chairman Ron Sandler. Some £2.8bn has been handed back since December.
Chief financial officer Ann Godbehere told a Treasury Select Committee that the loan would be repaid even if the housing market suffered a recession similar to that of the early nineties.
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At worst, the repayment timetable would be delayed by six months, she added.
But Sandler warned that a "significant downturn" in the economy and "significantly higher" unemployment would place "considerable strain on the ability of the company to deliver the plan."
Rock was nationalised back in February after it was forced to seek emergency funds due to the impact of the credit crunch.
