In its latest report, the lender - nationalised by the former Labour government three years ago - confirmed it had lost Â£232 million ($374.7 million) in 2010, but chief executive Ron Sandler insisted profitability was not a prerequisite for privatization.
"I do not think profitability per se is an absolute precursor when it comes to a return to private ownership," he commented. "We believe we are on the right trajectory to return this business to profitability."
Mr Sandler added that Northern Rock would award bonuses totalling Â£13.1 million in spite of the disappointing figures - although he will not receive a payout himself - with finance director Jim McConville earning the biggest individual payout of Â£185,000.
Earlier this week, Barclays and the Royal Bank of Scotland were forced to defend their own conduct over performance-related remuneration after political and public criticism.
By Claire Archer