Shares of Virgin Money UK rose about 7% on Tuesday after it published a first quarter 2021 update saying trading in the three months to December 31, 2020, was in line with expectations with customer deposits up 0.9% to £68.1 billion “as further Covid-19 restrictions drove lower personal customer spending and businesses continued to maintain high levels of liquidity.”

The Glasgow-based banking group said it returned to statutory profit in Q1 2021 and that it “continues to perform resiliently, is robustly capitalised, and reaffirms the FY21 guidance and targets set out at FY20 results.”

Nonetheless, the bank said balance sheet credit provisions were £726 million.

In its outlook, Virgin Money UK said: “The economic outlook remains highly uncertain and given the extension of Government support measures it will be further into FY 21 before greater clarity emerges.

“The recent UK-EU trade agreement and accelerating delivery of the UK’s COVID-19 vaccination programme are both supportive to the longer-term economic recovery.

“However, recent further restrictions across the UK as a result of record infection levels are likely to delay the pace of normalised economic and transaction activity.

“As a consequence, VMUK continues to adopt a cautious view on economic assumptions and this is reflected in coverage levels, underwriting standards and liquidity levels.”

Virgin Money UK CEO David Duffy 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.“