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Northern Rock has established a panel of mortgage intermediaries to help customers coming off fixed-rate repayments as many of those with high loan-to-values struggle to meet their commitments.

Releasing a trading statement Ron Sandler, executive chairman for Northern Rock, said they had established an intermediary panel to help borrowers remortgage however he admitted there were a number of customers with deals of 95 plus LTV who could not be helped.

He said: "We have done our best to help customers as part of our redemption plan however there is a group who borrowed above the standard 90 per cent LTV. For those people it is hard to come up with a solution and I do not admit to providing the answer to everything."

Mr Sandler defended arrears figures, which have nearly doubled since 31 December from 0.57 per cent to 0.95 per cent at the end of April 2008, saying credit quality remained good.

He said: "We have not seen a deterioration in credit quality. Market conditions remain tough, which is a contributing factor. Furthermore, as our book shrinks the number of arrears will increase relative to this."

Referring to the repayment of the Bank of England's loan, Mr Sandler said market conditions would not impact on the schedule and said the bank had seen good progress with regards attracting retail deposits.

He said: "Repaying the taxpayer remains our priority and continues apace. We have seen retail deposits increase by one fifth since December from 10.5bn to 12.8bn and this is very positive."