Virgin Money Group recorded a solid financial performance in Q3 of this year, according to its results released today.
The group recorded growth in its total active relationship customer accounts, increasing by £51,000, to £3.7m, during the period.
Virgin Money Group’s mortgages remained broadly stable in Q3, coming in at over £57.5bn in a subdued market.
Business lending was up by 1.6%, totalling £8.7bn, and unsecured lending increased by 2.4% to £6.3bn, driven by 3.9% growth in card balances.
Deposits were also 0.4% higher in Q3, with further growth in term deposits at competitive rates.
According to the results, credit card arrears continued to gradually increase from low levels.
David Duffy, chief executive officer at Virgin Money Group, said: “We have delivered another quarter of good progress against our strategy, with growth in both deposits and our target lending segments.
“Given our strong capital position, we anticipate a total of £175m of buybacks for FY23 with more to follow as we normalise our surplus capital position by the end of next year.
“Our overall credit quality remains stable, and we are fully committed to doing the right thing by our customers, through competitive rates, innovative products and proactive communication, as well as supporting government initiatives to help people through the current challenging environment.”
Reaction:
Amit Patel, adviser at Trinity Finance:
“The rise in credit card arrears is of no surprise and with people still struggling with their household finances, this trajectory will continue for a while.
“The Bank of England needs to make a big call this week and let’s hope it’s the right one, to bring some relief to millions of households.”
Stephen Perkins, managing director at Yellow Brick Mortgages:
“Whenever financial hardship strikes a family or individual, the first things to go unpaid are the unsecured debts.
“Most would prioritise paying their rent or mortgage and utility bills and of course food and essentials over servicing their unsecured debt.
“During the current cost-of-living crisis, it is no surprise to see households borrowing more on credit cards to survive month to month, and eventually running out of credit and sinking into arrears.
“Mortgages are so far stable for Virgin Money due to the full impact of rate rises not being realised with much of their loan book yet, and the Mortgage Charter allows for some respite and support in the short term.
“However, a spike in mortgage arrears will surely follow in the months ahead.”
John Choong, equity research analyst at Investing Reviews:
“Virgin Money’s results show continued signs of encouragement that the lender is doing well amidst the macroeconomic environment, as evidenced by its £175m share buyback programme.
“Mortgage lending remains stable while deposits continue to grow.
“The rise in credit card arrears is the fly in the ointment, but something all lenders are having to deal with in the current climate.”
Paul Welch, founder and CEO at Large Mortgage Loans:
“We are talking to many clients that are being forced to sell or restructure their finances to survive.
“The fast increase in base rates will only accelerate the suffering of so many after surviving the energy and food crisis the experienced during the winter months.”
