The results, which are Virgin Money’s first as a combined business with CYBG, also detailed an underlying profit of £539m down 7% due to higher impairments from IFRS 9 adoption and normalisation.

Virgin Money will also not pay a dividend this year due to the loss.  

Ian Smith, Virgin Money’s chief financial officer said that the board had taken the difficult decision to suspend the dividend in 2019. He said: “The Board, incorporating feedback from our major shareholders, believes this is the right short-term action to enable us to deliver on our longer-term strategy and targets.”

He added that the dividend suspension was implemented to conserve capital and that the bank will reconsider resuming payments next year.

Despite the negative nature of the results, Virgin Money has highlighted a ‘Resilient operating performance in a challenging environment ’ with a NIM (Net Interest Margin) 1.66% in line with guidance and 6% reduction in underlying costs to £942m; pre-provision operating profit improved +1% in 2019.

Virgin Money also highlighted that the bank’s transformation was on track with a £53m of run-rate net cost savings achieved; on track for c.£200m FY22 target.

Alasdair Ronald of Brewin Dolphin, commented: “Virgin Money would have hoped for better news on its maiden results as one company. The bank has taken a significant hit from additional PPI provisions and the cost of the merger, while pressure on UK domestic earners continues to take its toll. The suspension of the dividend and lack of clarity over 2020 will likely not be well received; although, the statutory loss is lower than some had feared.

“The decline in Virgin Money’s net interest margin is disappointing, but not surprising against previous guidance. There are undoubtedly further challenges ahead, with increasing competition from other challenger banks potentially eroding new business margins. However, the integration appears to be on track and significant costs savings should be achieved.”

David Duffy, chief executive officer, added: “In the first year of our newly combined business, we have delivered a good operating performance in challenging conditions and made great progress on the integration and rebrand to Virgin Money.

“Our statutory result was significantly affected by additional PPI provisions, driven by the unprecedented surge in PPI information requests in August, along with anticipated Virgin Money acquisition-related costs.”