Virgin Money posts significant rise in pre-tax profits

Edinburgh-based challenger bank Virgin Money has posted a sharp rise in profits on the back of strong growth in its core mortgages, savings and credit card businesses.

The bank, which employs 200 in the Scottish capital, said underlying pre-tax profit increased by 33 per cent last year to £213.3 million.

Gross mortgage lending was up 12 per cent, at £8.4 billion, giving the bank a 3.4 per cent share of the UK mortgage market.

However, its impairment charges rose by £7.3 million to £37.6 million, with most of the rise coming in its credit card business.

The bank said that reflected increased credit card lending, which climbed by 55 per cent to £2.4 billion.

Meanwhile, retail deposit balances were up by 12 per cent, at £28.1 billion.

Virgin Money’s overall customer base increased at a rate of more than 35,000 customers per month, to reach 3.3 million.

The lender said that rise was driven “predominantly” through digital channels.

Chief executive Jayne-Anne Gadhia said: “We continue to target high-quality lending growth and the combination of strong new mortgage lending and improved customer retention resulted in 17 per cent growth in mortgage balances to £29.7 billion, significantly outpacing the market.

“Our credit card business continues to flourish and 55 per cent growth in prime credit card balances to £2.4bn means we remain well-placed to reach our target of £3 billion high-quality credit card balances at the end of 2017.

“The performance of our Essential current account was particularly strong and customer balances increased more than fivefold over the year.”

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