LONDON, Aug 5: Nationalised British bank Northern Rock said on Tuesday that the state would boost its capital by 3.0 billion pounds (3.7 billion euros, 5.9 billion dollars) after it suffered a first-half loss of 592 million pounds.

The group, which was nationalised after becoming a victim of the global credit crunch, said that Britain’s Labour government had agreed to convert up to 3.0 billion pounds of its debt into shares to strengthen the bank’s balance sheet, subject to approval from the European Commission.

“We have said we will put in up to 3.0 billion pounds,” British finance minister Alistair Darling told BBC radio in an interview.

“We have got to get state aid approval for that so we can’t give a precise figure.”

Northern Rock said it suffered a net loss of 592 million pounds in the six months to the end of June. That compared with profit after tax of 188 million pounds in the first six months of 2007.

Northern Rock, said it had repaid 9.4 billion pounds to the government, cutting its total loan to 17.5 billion pounds. That compared with 26.9 billion at the end of December 2007.

The bank was ravaged by the credit crunch, which forced it to request emergency funding from the Bank of England last September and sparked the first run on a British bank for more than a century.

“The external environment has deteriorated and the consequences of this for Northern Rock are increased credit losses,” said bank chairman Ron Sandler, commenting on the first-half results.—AFP