Virgin Money records 'positive and profitable' first quarter despite pandemic

High street lender Virgin Money said customer deposits increased by 0.9% to £68.1 billion in the last three months of 2020 and personal lending fell by 2% to £5.1 billion as the pandemic continued to leave customers cautious over their spending

The bank added that mortgages in the period reduced 0.2% to £58.2 billion and business lending was up 0.1% to £8.9 billion.

Government-backed bounceback loans increased 14% and larger coronavirus business interruption loan scheme (CBILS) and coronavirus large business interruption loan scheme (CLBILS) increased 19%. The business added it returned to profitability during the period.

Virgin Money also revealed it has added an extra charge of £49 million to its accounts to deal with its final PPI complaints, adding it processed the last one on January 25.

In total, Virgin Money said it has dealt with 740,000 complaints at a cost of £3.1 billion.

David Duffy, the chief executive, said: “Virgin Money had a profitable and positive first quarter and continued to prioritise our customers and colleagues through this uncertain external environment including through payment holidays and Government lending schemes.

"We have made a good start to the year with the launch of new customer propositions, further roll-out of our rebrand programme and a return to statutory profit, while maintaining a disciplined approach.

"The group remains strongly capitalised and we have good momentum as we look out into the remainder of the year.

"Given the current UK-wide restrictions and ongoing uncertainty, we maintain the cautious economic outlook we outlined in November and our full year guidance remains broadly unchanged.

"Looking ahead, the vaccine roll-out and EU trade deal are encouraging for the UK’s economic recovery and we remain focused on disrupting the market through a variety of innovative new products and propositions with a customer and brand experience that is the best in the market.”