Profits rise in strong year of performance at Virgin Money UK

Virgin Money UK says its statutory pre-tax profits are expected to be £417m, in an unaudited trading update today for the year ended 30 September 2021.

The company’s underlying pre-tax profits are expected to improve by 546% from £124m to expected £801m, driven by strong financial momentum and an improved wider economic climate. Total underlying operating income grew 2% to £1.6bn.

Mortgages were stable year-on-year at £58.1bn, as the Group continued to be selective amidst increasing competition.

Personal lending grew 4% to £5.4bn with strong performance from the cards book as lockdown restrictions were eased, while business lending was 5% lower at £8.5bn. 

Virgin Money UK says it is targeting above market lending growth across Business and Unsecured lending, whilst maintaining its Mortgage market share through to FY24. 

And it is aiming for gross cost savings of £175m over the next three years.

David Duffy, chief executive officer, said: “Following our decision to accelerate the next stage of our Digital First strategy, we are today announcing our medium-term growth, investment and efficiency targets, as well as details on FY21 performance.

“We performed very strongly in FY21, with an expected return to statutory profit before tax underpinned by significant underlying profit growth.

“We increased our net interest margin, reduced costs, improved impairments and delivered a strong capital progression which enabled the proposed reinstatement of a dividend.

“Our accelerated digital strategy will result in new propositions, including a digital wallet, and will deliver efficiency and agility improvements.

“The combination of these factors will help us to become a growth-oriented digital bank that offers a best-in-class experience and unique loyalty rewards for customers, and delivers double-digit returns for shareholders.”