Virgin Money’s underlying profit before tax increased by 53 per cent to £101.8m during the last six months of this year, from £66.4m in the same period last year.
The bank’s results for the six months to 30 June also revealed statutory profit before tax of £93.7m, up from £55m in the first half of 2015.
Mortgage balances increased to £27.7bn, 9 per cent higher than during the whole of last year.
Gross mortgage lending of £4.3bn was 19 per cent higher than the first half of 2015, while net lending of £2.2bn in the first six months of this year was 29 per cent higher than the same period last year.
This translated to a gross lending market share of 3.6 per cent and net lending market share of 12.7 per cent at the end of May, the last month for which data is available.
The results noted that the bank entered the second half of the year with a strong mortgage pipeline, so expectations are to achieve a market share of annual gross mortgage lending at the higher end of a 3 to 3.5 per cent target range.
Virgin Money is in a strong position to deal with a period of post-referendum uncertainty as a low risk retail bank with a high-quality asset base and unburdened by legacy conduct issues. Jayne-Anne GadhiaVirgin Money’s mortgage book comprised 82 per cent residential and 18 per cent buy-to-let mortgages at the end of June. The average loan-to-value of its retail mortgage portfolio was 55.4 per cent.
The whole mortgage book had arrears held at low levels, with loans over three months in arrears of 0.16 per cent, compared with the latest industry average of 1.04 per cent.
Chief executive Jayne-Anne Gadhia commented that since the vote to leave the EU, the bank has experienced continued strong customer demand and no evidence of changes in customer behaviour.
“Virgin Money is in a strong position to deal with a period of post-referendum uncertainty as a low risk retail bank with a high-quality asset base and unburdened by legacy conduct issues,” she commented, adding the company remains focused on maintaining a high-quality mortgage business.
Total costs - including the Financial Services Compensation Scheme levy of £7.8m - decreased by 2 per cent to £170.4m, compared with the same period last year.
In terms of regulation, Ms Gadhia stated the bank’s capital ratios and liquidity measures are comfortably ahead of current requirements.
“Our business model and customer-focused strategy, underpinned by our strong culture, enables us to meet the challenges of the evolving regulatory and competitive environment and ensures the business continues to deliver sustainable success for all stakeholders.
“Given that we are a UK-focused retail bank, we believe that our entire business will be within the ring fence when it comes into effect at the beginning of 2019.”
peter.walker@ft.com
