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Virgin Money UK PLC on Tuesday said it had a ‘positive’ quarter, with a nice bump in business lending taking its loan book over £72 billion.
The midcap lender said its business lending increased by 0.3% over the three months to June 30, the bank's third quarter, to £8.29 billion from £8.26 billion.
‘Business as Usual balances increased 1.6%, supported by the conversion of a strong pipeline of new business and an improved overall proposition, against a subdued market backdrop. Government-scheme balances declined by 7.5% to £1.1 billion as expected, as borrowers repay balances in line with their repayment schedule, while fraud cases remain minimal,’ the bank explained.
Mortgage lending slipped to £57.76 billion from £57.80 billion.
Virgin Money noted unsecured lending rose to £6.01 billion from £5.79 billion. It attributed this to ‘high-quality’ credit card balances from new account growth, higher retail spending and new digital retail products.
‘Virgin Money has had another positive quarter, financially and strategically. We've grown our balance sheet across all target areas, grown our customer base with innovative and compelling products, and recently announced Slyce, our responsible buy now pay later product. I was also pleased to commence our buyback programme in the quarter,’ Chief Executive David Duffy said.
Customer deposits fell to £64.08 billion from £64.39 billion.
Duffy continued: ‘Looking out into an uncertain economic environment, while our asset quality remains resilient and customers aren't yet showing signs of financial stress, we are helping our customers and colleagues navigate what will be a more difficult period for many.’
The lender said its net interest margin was ‘strong’ in the third quarter at 1.87%, which improved on the 1.83% recorded in the first half but down on the 1.89% seen in the second quarter. For financial 2022, Virgin Money expects its NIM to be about 1.85%.
It added: ‘We remain cautious as the UK economic outlook has weakened, reflecting intensified global inflationary pressures.
‘The Bank of England expects inflation to peak at 11% this year and GDP growth to slow sharply across 2023 and 2024, though expectations for unemployment remain low. Following the MPC's decision to increase rates in June, the group notes market expectations that further rate rises are likely in 2022.’
Shares in Virgin Money UK were 1.0% higher in London on Tuesday at 145.35 pence each.
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