NORTHERN ROCK has plunged £724million into the red — as thousands of its customers struggle to pay off their mortgages.
The bank — which pocketed £27billion of taxpayers cash — added that it would MISS targets to lend more money to Brits this year.
Chief executive Gary Hoffman insisted the bank was still making progress.
But Lib Dem Treasury spokesman said the Rock was paying the price for reckless lending — and 125 per cent mortgages — in the boom years.
Time bomb
He told The Sun: "I warned it was storing up a time bomb for the future - well that time bomb is now going off."
Bleak figures from the Rock showed that 22,141 mortgage customers are now three months behind on repayments — four per cent of its total loan book.
Four in ten of its borrowers now hold mortgages that are worth more than their homes.
Losses at the group in the half year to June 30 spiralled to £724.2million from £443.3million a year ago.
The Government wants to split the Rock into a good and bad bank — with the existing loans placed in a business that will gradually be closed down.
Abbey-owner SANTANDER has been mentioned as a possible buyer of the good part which would include savers' deposits.
The level of retail deposits across Northern Rocks' branches fell from £19.6billion to £18.4billion between January and June amid fierce competition.
Mr Hoffman said: "The current environment continues to be challenging."
Business Editor
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