A very sorry banker

It's very rare indeed for a bastion of Britain's corporate establishment to say sorry about anything - let alone say it in a public meeting.

So Sir Tom Mckillop's big sorry to shareholders, customers and employees is a proper event.

Royal Bank has much to be sorry for.

The bank expects to make losses this year. There's a £20bn hole in its balance sheet, which is being filled by capital provided by taxpayers.

It doesn't get much worse - although there's evidence today that for Britain's banks, we're a long way from the end of the bad news.

A part of Northern Rock, called Granite - which packages up mortgages and sells them to investors as bonds - has disclosed that mortgage customers are 90 days or more behind with the payments on more than 2% of £35.5bn of mortgages.

That compares with less than 0.5 per cent of mortgages that were 90 days in arrears in mid 2007.

To translate, it means borrowers are in some difficulty on more than £700m of mortgages.

The Rock disclosed this serious worsening in mortgage arrears when also announcing that in effect it will be winding down Granite - which was the vehicle which financed the Rock's rapid growth over many years.

The demise of Granite is a setback for any recovery in the mortgage-backed securities market.

Such a recovery was always something of an elusive hope.

But if banks can't find any way to raise money for mortgages from wholesale markets, it means Britain's housebuyers will remain starved of loans for some time yet.