Northern Rock has reported a statutory loss before tax for six months to 30 June 2009 of £724.2 million

The state-owned bank has also seen arrears levels rise. Residential mortgage accounts over three months in arrears, including Together loans, have risen to 3.92%, compared with 3.67% at 31 March 2009 and 2.92% at 31 December 2008. Excluding Together, residential mortgage accounts over three months in arrears are 2.85% at 30 June 2009

However, the Newcastle-based bank said it has seen improvements in early stage arrears (accounts under three months in arrears) in recent months

Gary Hoffman, chief executive of Northern Rock, said: “The current environment continues to be challenging