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Northern Rock promises to pay back loan

Northern Rock, which was nationalised by the government after almost collapsing last year, is to pay off its £24 billion state loan within two years.

The bank made the claim as it declared a pre-tax loss of £168 million today, the BBC reports.

According to Northern Rock, costs will be cut by 20 per cent and 2,000 staff members will lose their jobs in a bid to pay off the loan - which was funded by taxpayers.

These plans, however, have been criticised by the Unite trade union.

"Unite is calling on the company to ensure that any proposed restructuring must consider the welfare of employees and long-term success of the bank," it said.

"Decisions must not be made merely in the pursuit of short-term cost savings."

Northern Rock also admitted today that it did not think that it would move into a profit-making position for 2008, saying that it expected a "significantly loss making" year.

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