British mortgage bank Northern Rock, nationalised earlier this year, said retail savings balances improved in the first quarter and reported modest mortgage lending. However, it also said that arrears at the bank were up and the outlook for the UK market remains 'highly uncertain'.
In a trading update, the bank said gross residential mortgage lending in the first quarter was £1.2 billion sterling, while retail savings balances ended the quarter at £12.8 billion.
'The mortgage redemption programme is progressing well, with redemption levels in the first four months of 2008 in line with the plan,' the bank said.
'More difficult economic and market conditions, combined with a shrinking mortgage book have contributed to increased arrears levels. However, the overall credit quality of the loan book remains at a level assumed in the plan,' it added.
