27th Jul 2021 17:19
(Correcting that customer lending was GBP72.5 billion.)
(Alliance News) - Virgin Money UK PLC on Tuesday said third quarter trading was in line with board expectations and the lender raised its net interest margin guidance for the full-year.
The Glasgow-based firm said overall deposits fell by 0.8% quarter-on-quarter to GBP68.0 billion from GBP68.5 billion. It said more expensive term deposit balances declined in line with forecasts, as the company continued to reprice its portfolio lower.
Mortgage balances increased in the third quarter by 0.7% to GBP58.7 billion from GBP58.3 billion, in the second quarter. This was on higher new lending volumes and buoyant market conditions ahead of stamp duty changes.
Customer lending rose 0.4% quarter-on-quarter to GBP72.5 billion, from GBP72.2 billion, but was in line with the start of the lender's financial year on September 30.
Virgin Money said its net interest margin improved to 168 basis points in the third quarter, from 160 basis points in the second quarter.
It now tips annual net interest margin to top 160 basis points.
"The UK economic outlook improved further in the third quarter. The rollout of the vaccination programme and the easing of restrictions supported further positive revisions to expectations. Stronger GDP growth, lower unemployment, a robust housing market and greater consumer confidence are all positive indicators of the improving outlook for the operating environment," the firm said.
"We have increased full-year net interest margin guidance and, while Covid continues to impact the near-term, we have a strong capital position and robust provisions. We see great opportunities from further developing our digital capabilities to deliver an improved customer experience and greater efficiencies. We are well-placed to grow profitably next year as we play our role to support the UK economic recovery," said Chief Executive David Duffy.
Shares in Virgin Money closed up 2.0% at 196.70 pence each in London on Tuesday.
By Amrit Sahota; [email protected]
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