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Bank profits up

Virgin rises on ‘robust’ customer demand

Virgin flag 2

Flying the flag for challengers: Investors liked year end results (pic by Terry Murden)

Shares in FTSE 250 challenger bank Virgin Money rose more than 4% after it reported a 28% increase in underlying full-year profit amid robust customer demand and growth across its core products.

However, it warned that net interest margins for 2018 will be at the lower end of the range.

In the year to the end of December 2017, underlying pre-tax profit rose to £273.3m from £213.3m.

The company recommended a final dividend of 4.1p per share, making a total dividend for the year of 6p per share, up 17.6% on the year.

Total income was up 13.5% to £666m as the bank’s cost to income ratio dropped from 57.2% to 52.3%, while retail deposit balances increased by 10% to £30.8bn and mortgage balances were up 13% to £33.7bn.

Chief executive Jayne-Anne Gadhia said: “We generated market-beating growth across our core products as we continued to capture high-quality market share in mortgages and credit cards. We maintained our uncompromising focus on asset quality and we continued to improve our operating leverage.

“In doing so, we met or exceeded all of our financial targets for the year.”

Ms Gadhia added: “We continue to experience robust customer demand and stable customer behaviour in a resilient housing market, and we expect to maintain solid double-digit returns in 2018.”

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