Virgin Money first-half profit soars to £315m

Virgin Money, the Glasgow-headquartered banking group formerly known as CYBG, on Thursday posted a pre-tax profit for the six months ended March 31 of £315 million compared with £72 million for the same period a year earlier.

Virgin Money said its operating income of £865 million was 16% higher than H1 of 2021.

Net interest margin (NIM) increased 27bps to 1.83%, with a Q2 NIM of 1.89%.

Virgin Money declared a 2.5p interim dividend and said: “Expect a 30% full year dividend pay-out level; given strong capital position …”

The group reported strong “relationship” deposits growth, increasing 4.2% to £31.9 billion, reflecting new current account customer acquisition, but overall deposits were down 3.7% to £64.4 billion.

It said “targeted volume growth” saw a “stable” loan book at £71.9 billion.

Unsecured lending grew 7% to £5.8 billion driven by strong cards growth, and business lending declined 2.5% to £8.3 billion.

Virgin Money reported “stable mortgage balances” at £57.8 billion “with volumes managed tactically, prioritising margin in a competitive environment.”

Virgin Money CEO David Duffy  said: “We’ve made good progress against our strategy, while delivering a significant increase in profit.

“We have positive momentum in attracting new customers to Virgin Money through record credit card sales, good growth in personal current account openings and a strong uptake of our new digital fee-free business current account.

“We have upgraded our net interest margin guidance given strong growth in unsecured lending, combined with the rising interest rate environment.

“Looking ahead, while the macroeconomic outlook is uncertain and there are increased cost pressures on consumers, we remain prudently provisioned and are confident in the quality of our loan portfolio.”

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