Virgin Money delivers ‘positive quarter’ as it expands balance sheet

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Virgin Money said unsecured lending rose 3.8% in the third quarter to £6.0bn, driven by growth in “high quality” credit card balances.

Business loans rose 0.3% to £8.3bn, despite a sluggish market and a drop in government-backed loans.

Virgin Money saw a 45% year-over-year increase in sales of personal and business digital current accounts and 160,000 new credit cards were opened in the third quarter.

Virgin Money said it delivered a positive performance over the past quarter and customers are still showing no signs of financial stress, despite the economic uncertainty.

David Duffy, Chief Executive, said: “Virgin Money had another positive quarter, both financially and strategically. We expanded our track record in all target areas, expanded our customer base with innovative and compelling products, and recently announced Slyce, our responsible buy now, pay later product. I was also pleased to launch our buyback program during the quarter.

“In an uncertain economic environment, while our asset quality remains resilient and clients are not yet showing signs of financial stress, we are supporting our clients and colleagues through what will be a more challenging time for many.”

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In a statement, Virgin Money said: “We remain cautious as the UK economic outlook has weakened, reflecting mounting global inflationary pressures.

“The Bank of England expects inflation to peak at 11% this year and GDP growth to slow sharply in 2023 and 2024, although unemployment expectations remain low.

“Following the MPC’s decision to raise rates in June, the Group notes market expectations that further rate hikes are likely in 2022.

“In key portfolios, there are currently limited signs of credit problems; overall arrears have remained low and stable over the period and there have been no significant changes in individually assessed provisions. However, the group recognizes the potential accessibility issues that the rising cost of living will cause for households and is ready to support customers, as has been the case throughout the pandemic.”

The statement added: “The group remains focused on advancing its digital strategy to deliver an enhanced digital customer experience while improving efficiency and reducing costs over time.

“We are working hard to reduce business costs, despite rising inflation and the impact of our colleagues’ cost of living allowance. As a result, we continue to expect costs to undercut. underlyings for FY22 remain broadly stable compared to FY21. This reflects the additional costs of higher inflation, cost of living allowance for our colleagues, targeted growth and digital development more than offset by savings gross resulting from the ongoing digital transformation and restructuring.

The statement added: “We remain on track to deliver approximately £175m of gross cost savings by FY24, with approximately £275m of digital development and restructuring costs on the same period.”

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