Speaking to the Times newspaper, Mr Pym said the bank’s arrears rate would continue to decline for the rest of the year, predicting that loan losses for 2009 would stand between £600 million and £700 million.

Since Bradford & Bingley was taken into public ownership in September it has borrowed over £20 billion from the Government, with billions more set to be sunk into the troubled bank over the next year as its wholesale loans from the private sector mature faster than its mortgages are repaid.

Santander Group bought the Bradford & Bingley savings business and branches last year, and will soon re-brand them to bare the Santander name. 

Mr Pym, who was hired to wind down the “rump” business, which has outstanding mortgages of over £40 billion, said: “Although many aspects are grim, we are confident the outcome will be satisfactory for taxpayers.”