Impairments on bad loans at Northern Rock have more than trebled to £894m as mortgage arrears grew by more than 50 per cent in the autumn, the UK state-controlled bank announced on Tuesday as it reported full-year losses of £1.36bn.

The losses have come in spite of increased conservatism at the group, which has slashed the amount it owes the taxpayer by £18bn as it continues to shrink its mortgage book and bolster its depositor base.