Virgin Money performing in line as credit behaviour remains 'stable'

Virgin Money updated the market on its third quarter trading on Tuesday, reporting that profitability, earnings and underlying return on tangible equity were all in line with expectations.

The FTSE 250 banking firm said it made further improvement in its overall net promoter score to +40, up from +29 at the end of 2016, which it said made Virgin Money “one of the best-rated” retail banks for customer satisfaction.

Gross mortgage lending stood at £6.5bn at the end of the third quarter, which gave the company a market share of 3.5%, with net mortgage lending at £3.2bn, for a market share of 10%.

Credit card balances were £2.9bn at period end, with the bank reporting “stable customer behaviour”, while its banking net interest margin was said to be in line with 2017 full-year guidance.

Virgin Money said credit performance continued to remain stable across both mortgages and cards.

Its full-year 2017 CET1 ratio was expected to be around 13.5%, the company’s board said, and it reaffirmed its previous full-year guidance.

“Our low risk business model and customer-focused strategy continues to deliver excellent results and I am delighted with the ongoing momentum of the business,” said Virgin Money’s chief executive officer Jayne-Anne Gadhia.

“The UK housing market continues to prove resilient and in a competitive mortgage market we remain focused on growing assets at the right price and quality.

“Our prime credit card business is developing as planned and, as a responsible lender, the strict and consistent application of underwriting standards supports a low and stable cost of risk as well as resilience in the future.”

Gadhia said ensuring that customers were always at the heart of Virgin Money’s strategy had seen its overall net promoter score improve to +40 in 2017, making it one of the best-rated retail banks in the UK for customer satisfaction.

“I am delighted that more customers than ever before would recommend us to their friends and family.

“The strength of our core business and our focus on doing the right thing for customers, combined with our exciting plans for the future, gives us real conviction in our longer term prospects.

“We look forward to saying more about our plans for the future at our investor update on 16 November,” Gadhia said.