But at the same time the State-owned lender reveals that more than 4% of its mortgage borrowers – over 22,500 people - have defaulted on their homeloans.

Northern Rock was divided into a ‘good’ bank and a ‘bad’ bank on 1st January 2010.

Its banking licence, new mortgage lending business and retail branches now form the ‘good’ bank (Northern Rock plc), which will be sold off. The rump business was left in the ‘bad’ bank, Northern Rock (Asset Management), which is the bank reporting results today.

Before nationalisation, Northern Rock specialised in ‘Together’ mortgages, which lent borrowers up to 125% of their property’s value. Some of these customers were hard hit by the recession, and have since gone into arrears on their mortgages.

Northern Rock’s mortgage arrears rate grew in the first half of last year, before stabilising in the last quarter, with accounts over three months in arrears settling at 4.28% of all customers, compared with 2.92% at the end of 2008.

The bank is to pay out £16m in staff bonuses, but chief executive Gary Hoffman will not take up his own bonus.

On releasing the bank’s results, Hoffman said:

"The outlook for the UK economy remains uncertain. After a contraction in the economy during 2009, with increases in unemployment and house price deflation, conditions appear to have stabilised, but economic recovery is still expected to be relatively weak."

He said that mortgage repayments "remain affordable for those in employment" thanks to the current historically low Bank Base Rate, but warned that Northern Rock’s future performance will be influenced by the timing and extent of increases in rates.

He also admitted that loan loss impairment charges are expected to remain high during 2010, but below the level recorded in 2009.

"It is over two years since Northern Rock entered public ownership. During that time the company has made good progress in pursuit of its objectives that include repayment of state aid, delivering value for taxpayers and ultimately a return to private ownership.

“We are looking forward, not back, and my colleagues across the business remain committed to delivering a high standard of service for all of our customers.

“We are on the right trajectory and I am confident that, with the current strong management team in place, we are well positioned to deliver against our objectives in 2010," he added.