Image copyright PA Image caption Northern Rock was nationalised in February 2008

There was big controversy in November when the government sold the so-called good bits of Northern Rock to Virgin at a loss which could be greater than £500m.

But the part of Northern Rock that is still owned by taxpayers, and has been combined with the mortgage book of Bradford and Bingley, today announced a very handsome profit for 2011 - of £1.1bn, an increase of 145%.

What is striking, just to labour the point, is that the annual profit on this business, now called UK Asset Resolution, exceeds the losses incurred by the Treasury on that contentious privatisation.

The reason for the big profit - which also allowed UK Asset Resolution to repay £2bn of money it borrowed from the Treasury - is that there has been a sharp reduction in loans going bad and running costs have fallen.

Even more encouraging, UK Financial Investments, which manages taxpayers' holdings in banks, estimates that the government will have generated a cash surplus of £10bn when all Northern Rock's mortgages are eventually repaid.

That would represent an annual rate of return in the region of 3.5% to 4.5% for the Treasury, which is perhaps a tiny bit better than what it costs the government to borrow. Or to put it another way, taxpayers may eventually end up with a genuine profit on the 2008 nationalisation of Northern Rock.