The UK Asset Resolution (UKAR) said that the remaining Northern Rock and Bradford and Bingley are paying back to the government quickly following a bailout from the authorities.

UKAR said that it has paid £3.8 billion to the government in the first nine months of the year including £3.1 billion for loan repayments. The banking chunk had paid around £2.6 billion during the same period of the previous year. Following the payments, the bank owns £40.4 billion to the UK government.

UKAR recorded a fall in its loan balances by £6bn or 6.5 per cent to £64.3 billion this year. The repayment was boosted as the bank recorded an increase of 15 per cent in profits to £856 million compared to the same period of the previous year. The bank has been selling off loan portfolios to other lenders, including the £400 million sale of Northern Rock Asset Management's unsecured personal loan book.

Richard Banks, chief executive of UKAR said, "They would be mad to redeem their mortgage. If you were a commercial organisation it may be different, but we are funded by the Government."