More than 22,500 Northern Rock customers – over 4% – have missed monthly mortgage payments, the nationalized mortgage lender admitted today as it reported a sharp fall in losses for last year. Despite the losses – down to £257m (US$385bn) from £1.3bn a year ago – the bank is paying out £15m in bonuses to its staff and will be paying £1.5m to the UK Treasury to cover the cost of the one-off tax on the payments. Chief executive Gary Hoffman is waiving his bonus although the bank said a new long-term incentive scheme was being drawn up for the former Barclays executive. The new scheme for Hoffman will pay out only when the nationalized bank returns to profit or if it can be returned to private hands. The bank, which was split into a "good" and "bad" operation at the start of the year, actually managed to make a £466m profit in the second half of the year although this was not enough to offset losses in the first half, and charges for impaired loans of £1bn. The operation reporting today is Northern Rock (Asset Management) plc – technically the "bad" bank. Before it was nationalized, the company specialized in so-called Together loans – allowing customers to borrow more than the value of their home – and this left it a legacy of large customers in arrears.