Virgin Money reported mortgage balances down 2% to £56.6bn in the primary six months of the yr, because it prepares for its merger with Nationwide.
The excessive road financial institution stated its decrease house mortgage lending reflecting “the speed surroundings and wider cost-of-living pressures tempered buy exercise, albeit with indicators of improved market exercise ranges since January,” in its interim outcomes to the tip of March.
Mortgage yields elevated 83 foundation factors, resulting from larger rates of interest, including that its mortgage curiosity earnings was 31% larger than a yr in the past.
In the interval, it rolled out its premium dealer service to 225 mortgage intermediaries, masking round 40% of the financial institution’s functions.
Overall, the financial institution’s lending edged 0.3% larger to £72.7bn on a yr in the past, lifted by larger enterprise and unsecured loans.
Pre-tax revenue jumped 18% to £279m, primarily reflecting decrease impairment fees.
However, Virgin Money chief government David Duffy stated that “following a great first half we do count on some headwinds” in the ultimate six months of the yr.
He stated this might come from “downward strain” on its web curiosity margin, which got here in at 1.94% — however is predicted to return in at between 1.90% and 1.95% in the second half of the yr.
Duffy added he additionally anticipated strain from “ongoing competitors, decrease rates of interest” and a decrease contribution from its bank card portfolio.
Last month, Virgin Money shareholders voted by an 89% majority to just accept the £2.9bn takeover provide from Nationwide, which is able to create the second-largest mortgage lender in the UK.
The Competition and Markets Authority has launched a probe into the takeover to look at whether or not the transfer will “end result in a considerable lessening of competitors inside any market or markets in the United Kingdom for items or providers”.
However, the financial institution stated in the present day that on account of the merger, it doesn’t intend to announce any additional share buybacks or dividends and has “deferred sure restructuring actions”.
