Upbeat Virgin Money enjoys ‘market-beating’ expansion
CHALLENGER BANK Virgin Money has seen profits outstrip expectations, jumping by nearly a third after it secured “market-beating growth” across its financial products.
Virgin Money’s underlying pre-tax profits rose 28 per cent to £273.3m, as mortgage balances and retail deposits climbed 13 per cent and 10 per cent respectively.
Total income also lifted 14 per cent to £666m in 2017, up from £586.9m the year before.
Chief executive Jayne-Anne Gadhia said: “We generated market-beating growth across our core products as we continued to capture high-quality market share in mortgages and credit cards. We maintained our uncompromising focus on asset quality and we continued to improve our operating leverage. In doing so, we met or exceeded all of our financial targets for the year.
“We continue to experience robust customer demand and stable customer behaviour in a resilient housing market, and we expect to maintain solid double-digit returns in 2018.”
On a statutory basis, pre-tax profits soared by 35 per cent to £262.6m after its cost-toincome ratio improved, dropping by 5 per cent to 57 per cent.
Credit card balances rose 24 per cent to £3bn for the period, with the lion’s share of the growth coming from customers who already had deposit accounts. However, the firm cast a dim outlook for 2018 trading as it braces for “relatively benign” economic conditions, “modest economic growth” and stiffer competition.
Virgin Money, which has 3.34 million customers, pushed into small business banking in January in an attempt to narrow the gap on Britain’s biggest lenders.
It launched an SME savings account and set sights on securing £5bn of SME deposits within five years.