Virgin Money delivers 'positive quarter' as it grows balance sheet
Virgin Money today revealed that it delivered a "positive" performance over the last quarter and customers are still not showing signs of financial stress, despite the economic uncertainty.
Virgin Money said that unsecured lending grew by 3.8% in the third quarter to £6.0bn, which was driven by growth in "high-quality" credit card balances.
Business lending was up by 0.3% to £8.3bn, despite a subdued market and lower Government-backed lending.
Virgin Money recorded a 45% year on year increase in digital personal and business current accounts sales and 160,000 new credit cards were opened in the third quarter.
David Duffy, Chief Executive Officer, said: “Virgin Money has had another positive quarter, financially and strategically. We’ve grown our balance sheet across all target areas, grown our customer base with innovative and compelling products, and recently announced Slyce, our responsible buy now pay later product. I was also pleased to commence our buyback programme in the quarter.”
“Looking out into an uncertain economic environment, while our asset quality remains resilient and customers aren’t yet showing signs of financial stress, we are helping our customers and colleagues navigate what will be a more difficult period for many.”
In a statement, Virgin Money said: "We remain cautious as the UK economic outlook has weakened, reflecting intensified global inflationary pressures.
"The Bank of England expects inflation to peak at 11% this year and GDP growth to slow sharply across 2023 and 2024, though expectations for unemployment remain low.
"Following the MPC’s decision to increase rates in June, the Group notes market expectations that further rate rises are likely in 2022.
"Across key portfolios, there are currently limited signs of credit concerns; overall arrears remained low and stable during the period and there were no significant changes in individually assessed provisions. However, the group recognises the potential affordability issues that higher living costs will cause for households and is ready to support customers, as was the case throughout the pandemic."
The statement added: "The group remains focused on progressing its digital strategy in order to deliver an enhanced digital customer experience while driving improved efficiency and cost reduction over time.
"We are working hard to take costs out of the business, despite increasing inflation and the impact of our colleague cost of living allowance. Consequently, we continue to expect underlying costs for FY22 to remain broadly stable compared to FY21.This reflects additional costs from higher inflation, our colleague cost of living allowance, targeted growth and digital development largely offset by gross savings from ongoing digital transformation and restructuring.
The statement added: "We remain on track to deliver around £175m of gross cost savings by FY24, with around £275m of digital development and restructuring costs across the same period."