A MILESTONE was passed today when the “bad bank” set up to manage mortgages sold by Bradford & Bingley and Northern Rock said it had repaid all of the outstanding loans to the Treasury.

UK Asset Resolution said today it has returned the last of the £49 billion used to fund the bail-outs of the two building societies which became banks and over extended themselves.

That leaves the Government’s stake in Royal Bank of Scotland as the last major remaining bail-out made by the Treasury to keep the financial system from complete collapse in 2008.

This year UKAR sold another £8.4 billion of loans to various buyers including Rothesay Life and Arrow Global.

It still has a few assets left to get rid of — 35,000 customers, many of whom have buy-to-let loans totalling £5.5 billion. UKAR says most are performing well, with a low number of arrears.

Chief executive Ian Hares expects UKAR to be wound down by next year, leaving 138 people, including him, out of work. Hares, formerly of Santander and Alliance & Leicester, managed to repay the government loans several years earlier than expected and said he was “delighted” by the progress.

