Virgin Money continues positive performance

Virgin Money UK says it has continued its positive trajectory in the third quarter of the year.

In a trading update covering the three months to 30 June, the business which owns Yorkshire and Clydesdale Bank, noted its mortgages balances increased by 0.7% to £58.7bn which reflected the buoyant market conditions ahead of the stamp duty land tax changes.Personal lending balances also increased in the quarter with credit car levels returning to pre-Covid levels.

In contrast business lending declined by 2.4% over the three month period with business as usual book declining by 2.2% as a result of lower market activity – however the bank added it expects this to improve later in the calendar year.

David Duffy, the bank’s chief executive officer said:”Virgin Money performed well as our strategy continued to translate into improved financial delivery in a strengthening environment.”

The third quarter also saw the launch of a new greener mortgage product and the first sustainability-linked business loans alongside offers including credit card cashback.

Duffy noted: “The positive reaction to our switching incentives and product launches reflects our focus on transforming customer experience, backed by the unique advantages of one of the world’s most-recognised brands. We have also advanced our ESG agenda with our first greener mortgage product and sustainability-linked business loans.”

This positive third quarter follows the bank noting a resilient performance in Q1 and a return to statutory profit in the first half of the year.

Looking ahead the bank highlighted the UK’s economic outlook had improved over the period and that the rollout of the vaccination programme and easing of restrictions would support “further positive revisions to expectations”. It also accepted that “while risks remain” from the increase in Covid case numbers and from the removal of Government support schemes later in the year it believes “the strengthening backdrop gives scope for greater optimism about the pace of the recovery”.

Duffy said: “We have increased full-year NIM guidance and, while Covid continues to impact the near-term, we have a strong capital position and robust provisions. We see great opportunities from further developing our digital capabilities to deliver an improved customer experience and greater efficiencies. We are well placed to grow profitably next year as we play our role to support the UK economic recovery.”