Bank recovers

Virgin Money back in profit amid ‘strong momentum’

Virgin Money

Back in black: profits have risen at Virgin Money (pic: Terry Murden)

Virgin Money expects a strong recovery in underlying profit and will reinstate its dividend.

The bank says underlying profit before tax will soar by 546% to £801m thanks to “strong financial momentum”.

Pretax profit for the year ended 30 September is anticipated to be £417m compared with a reported loss of £168m for the same period a year earlier.

Business lending fell 5% to £8.5bn as business activity was “subdued” while personal lending grew 4% as the economy recovered from lockdown restrictions.

The company is targeting gross cost savings of around £175m over the next three years, it said. Around 50% of these savings will be reinvested.

The board plans to declare a final dividend of 1p.

Overall, the programme will see an acceleration of investment into FY22, where costs are now expected to be broadly stable, before the additional efficiency savings drive cost reductions out to FY24.

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