Nationalised British lender Northern Rock posted a reduced first-half loss of 78.8 mln pounds ($128 mln) and said it continues to work on plans for its eventual sale back to the private sector.
Last year it made a first-half loss of 140 mln pounds, and the company said it now expects to start trading profitably some time in the second half of 2012.
Northern Rock was fully nationalised three years ago after nearly collapsing during the credit crunch. British finance minister George Osborne said in June that he aimed to find a buyer for it this year.
Aggressive lending practices caused the bank's near collapse in 2007 when borrowing dried up and Britain propped up Northern Rock with 1.4 bln pounds of taxpayers' money during the crisis. It had liquid assets of 5.9 bln pounds at the end of 2010, and posted a loss of 232 mln pounds for that year.
VIRGIN MONEY'S INTEREST IN NORTHERN ROCK
After its near-collapse, Northern Rock was split into a "good bank" comprising new mortgages and savings, and a "bad bank" holding its toxic assets.
The "good bank" is the part being sold, while the government continues to wind down and run off the "bad bank's" toxic assets although these could also be sold to a private party.
The Northern Rock sale is being handled by Britain's UKFI organisation, which was set up to manage the state's holdings in banks bailed out during the crisis, such as Lloyds and Royal Bank of Scotland where Britain finished up with respective stakes of 40.6% and 83%.
"We are working closely with UKFI and our advisers to explore the options for a sale of Northern Rock, at the right time and in the best interests of taxpayers," Northern Rock Chairman Ron Sandler said in a statement.
"We are pleased with the level of interest we have received, and will continue to explore the sale option over the coming months," he added.
Two sources with knowledge of the matter have told Reuters that Virgin Money has submitted an expression of interest.
Analysts have said that private equity company JC Flowers may also be interested in Northern Rock.
