Britain’s ‘bad bank’, which is running down the loans of two bailed out lenders, said it repaid £500 million to the government in the six months ended September.

UK Asset Resolution Ltd (UKAR), a state-run 'zombie bank' that does not take on new business, said it had now returned £14.6 billion, or 30 per cent of the loan to the government.

The bank said it had reduced the size of its balance sheet by £8.5 billion during the period.

UKAR is winding down the loans of Northern Rock and Bradford & Bingley, which were nationalised during the financial crisis of 2007 to 2009.

The bank said its first-half underlying pretax profit fell to £612.1 million, from £692.9 million a year earlier.

Reuters