Virgin grows mortgage lending, says nothing about float plan
Virgin Money says it has increased lending in the mortgage market in the third quarter and hopes to have its in-house credit card available by the end of the year.
It estimates that it took 4.5% market share of new mortgage applications in the quarter and increased retail deposit balances by over 3% to £21.8 billion.
The company increased gross mortgage lending during the three months to the end of September with mortgage completions 19% higher than the average of the first two quarters. The mortgage book increased by 3% to £20.9 billion at the end of the quarter.
Credit card balances during the quarter remained slightly ahead of expectation, ending the period at around £1 billion. More than £700 million of the credit card balances are held on Virgin’s balance sheet and £300 million by credit card partner MBNA pending transfer to Virgin on 30 November.
In its statement the company made no mention of its delayed flotation. It is understood, however, that it remains committed to seeking a listing on the London Stock Exchange before the end of the year, depending on market conditions.
The company continues to drive down its cost:income ratio which, at 70.9%, is very high. It says it wants this below 50% and it expects to achieve this through growth rather than cost cutting.
Edinburgh-based chief executive Jayne-Anne Gadhia, said: “Following a very strong performance in the first half of the year, we have accelerated our growth in the third quarter of the year, while continuing to build a high quality balance sheet to deliver increasing returns to our shareholders.
“One of Virgin Money’s core strengths is our robust capital position and high asset quality. As such we welcome the new leverage ratio framework announced today by the Financial Policy Committee, and are pleased to note that we operate in excess of the recommended requirements.
“In mortgages and savings, we achieved strong growth during the quarter, particularly in terms of new mortgage applications where we took a market share of around 4.5%. We also saw strong growth in our net interest margin and maintained a tight grip on costs despite investing in the build of our credit card and current account platforms.
“Looking to the future, we have a powerful brand, a strong balance sheet, a strong core business franchise and considerable opportunities to continue to extend our product range. The business has performed strongly in 2014 to-date and we are confident that we can continue to deliver progress against our strategy as we continue to grow the business.”