Northern Rock, which was nationalised at the height of the financial crisis in February 2008 to prevent its collapse, reported losses of £232.4 million in 2010.
The firm said the loss was in line with expectations and that income had improved and costs reduced in the second half of the year.
It also stated that the company continues to prepare for a return to the private sector.
Ron Sandler, executive chairman of the firm, said: "2010 represented a year of significant restructuring for Northern Rock, as well as being its first full year of trading."
Northern Rock plc was formed on 1 January 2010 from the restructuring of the former Northern Rock business, which was split into two, with the second arm called Northern Rock Asset Management.
This allowed Northern Rock plc - the "good bank" - to continue providing new lending and offer more consumer choice in the mortgage market.
Sandler added: "While it is always disappointing to report a loss, this in part reflects the high level of liquidity held, the costs incurred in relation to the government's retail and wholesale guarantees, which have now been removed and other exceptional costs incurred as the company was restructuring."
The underlying loss incurred in the second half was £92.4 million, compared to £140 million in the first half, which Sandler said demonstrated the progress being made and that the firm was on the right trajectory to profitability.