Seems so - and remember it is a loan that will mostly be paid back. Northern Rock loan book currently is about £84 billion, most funded from savers. Guardian says "about half of the £26bn government loan to Northern Rock in the wake of its collapse had already been paid back".

Losses depends on how much mortgage default there will be. I did some back-of-envelope estimates a month ago, for what I then thought was worst case, and thought the loan write-offs worst case was about £3 billion:

Looking at the 2008H1 accounts the loans split is:

7% Buy to let
26% Together
67% Standard

If we assume 25% of the non-standard loans and 10% of the Standard loans go wrong, and in each case 25% of the loan cannot be recovered, I make the write-off £3.1 billion:

(((0.33 * 0.25 * .25) + (0.67 * 0.1 * .25)) * 84.4 = 3.148

Arrears are currently less than the Council of Mortgage Lenders average.

But it does seem to have £3.5 billion of "Treasury investments" graded lower than AA, which is probably a worry, though impairment charges have been made against this risk.

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