Virgin Money delivers continued momentum in H1, Q2 trading seen broadly in line

Lender Virgin Money said on Tuesday that it has delivered "continued business momentum during H1", with trading in Q2 broadly as anticipated.

Virgin Money said it had delivered good financial progress during H1, with customer loans stable at £72.7bn, mortgages down 2% at £56.6bnm business lending up 7% at £9.3bn and unsecured lending 3% higher at £6.7bn. Customer deposits increased 2% to £68.2bn,

Net interest margins improved in Q2, supported by effective interest rate adjustments in its credit cards portfolio, reflecting strong customer activity and updated assumptions. Virgin Money expects NIM for H1 to be at the upper end of its FY24 190-195bps range.

Looking forward, Virgin Money expects to see downward pressure on net interest margins in H2, primarily reflecting a lower expected contribution from cards effective interest rate adjustments, and ongoing competition. It also anticipates cost pressures from inflation and investment, which will only be partially mitigated by its ongoing cost savings programme.

Chief executive David Duffy said: "Over the first six months, we have continued to deliver on our strategic ambitions in line with expectations. While we expect there to be headwinds through the second half of the year, we remain well placed to deliver growth in our target segments."

Virgin Money added that it believes its acquisition by Nationwide presents "an exciting opportunity" to build on its significant strategic progress by combining two complementary businesses that together can offer more great products and services to a larger customer base, while delivering value for our shareholders.

As of 1025 BST, Virgin Money shares were down 0.093% at 214.80p.

Reporting by Iain Gilbert at Sharecast.com