For the six months to March 31, interim pre-tax profits at the lender more than doubled to £245m from £120m a year ago. Last year, Virgin Money reported a pre-tax loss of £7m.

Profits were boosted as impairments for bad COVID-19 debts dropped by 84% to £38m compared with a year earlier. The decrease in impairment charges offset the lower retail banking income caused by record-low interest rates.

However, Virgin Money also reported a further £59m hit from the payment protection insurance (PPI) scandal after a higher level of internal reviews into complaints led to more customer payouts.

Personal loans dropped 3.2% to £5.1bn in its first half consumers cut unnecessary in spending and saved instead. The group also saw business lending drop by 0.6% to £8.9bn.

David Duffy, chief executive, said that the bank had a “strong first half” adding that the group had “made significant strategic progress to transform Virgin Money into a leading digital bank and our rebranding is largely complete.”

He said: “We are cautiously optimistic about the improving outlook as the impact of the vaccination programme in the UK delivers positive revisions to economic expectations.

“We’re continuing to manage through what is still an uncertain economic backdrop, but the bank is well placed, with a strong balance sheet, and through ongoing strategic delivery we have a clear path to long-term, improved sustainable returns.”