Customer lending rises at Virgin Money UK amidst economic uncertainty

Virgin Money UK has reported prudent, profitable growth in customer lending in a first quarter 2023 trading update.

The bank saw mortgages grow 0.4% during the quarter to £58.4bn, as a strong pipeline drove completions.

In the same period, business lending was up 2.4% in to £8.4bn, while unsecured lending increased 0.9% to £6.2bn. Overall deposits grew 1.2% to £66.2bn, with strong growth in new term deposits at attractive pricing offsetting lower savings balances.

David Duffy, chief executive officer, said: “We’ve had a positive first quarter with continued good progress on digitisation and growth in lending across the business as more customers choose Virgin Money.

“Arrears remain broadly stable but we’ve increased the support available to those who need it and remain prudently provisioned for an uncertain economic outlook.

“Looking ahead, we have good financial momentum and a number of exciting digital product launches to come which will support our continued growth.”

Virgin Money UK adds it continued to attract new current account customers during the quarter, supporting its strategy to build a lower cost, stable funding base.

There were about 27,000 new personal current accounts opened in the period (+44% year-on-year), which the bank says reflects a strong performance in a competitive environment.

The bank states it was particularly pleased with its Business Current Account (BCA) performance, as it opened aroud 9,000 new BCAs (+92% year-on-year), increasing its market share despite a difficult market.

Virgin Money UK says it remains cautious on credit, given expectations for GDP growth are to remain challenged and inflation forecast to persist.