Bank 'making progress'

Virgin Money beats own target for SME lending

Virgin Money flag 2

Flying the flag for SMEs

Virgin Money has beaten its commitment to lend £6 billion to SMEs over three years, said David Duffy, chief executive.

The rebranded CYBG is also making progress in introducing new products for personal and business customers.

The first Virgin Money digital personal current account was launched last month. The bank also began the rebrand of the store network, with three Virgin Money concept stores launched in Manchester, Birmingham and London, while an extensive programme to rebrand the entire network will accelerate during the second half of 2020.

“The Group continues to perform well,” said Mr Duffy in a trading update. “In a difficult market, our own performance has remained on track and we continue to make strong progress on our ambition to disrupt the status quo.

“We are attracting relationship deposits and delivering growth in customer balances across business and personal, while maintaining our discipline in a competitive mortgage market.  

“We have also now delivered on our commitment to lend £6bn to SMEs over the three years to the end of 2019, with £6.5bn lent in total. This included lending of £1.3bn in Scotland, £0.9bn in Yorkshire, £0.9bn in the North West and £0.5bn in the Midlands, demonstrating our support for SMEs across the regions of the UK.

“We’ve launched the first Virgin Money digital personal current account and unveiled three new Virgin Money concept stores as planned in December. We are also progressing at pace with our plans to launch new and exciting Virgin Money products for personal and business customers throughout 2020.

“While sentiment improved following December’s election result, the UK banking market continues to face competitive pressures and uncertainty over the final Brexit settlement. However, we continue to focus on supporting our customers in their everyday lives, delivering on our strategic priorities and meeting our medium-term financial targets.”

Market reaction

John Moore, senior investment manager at Brewin Dolphin, said: “Virgin Money’s share price bounced significantly late last year on the back of results deemed to be ‘not as bad as expected’ – they have, however, drifted lower since and have nearly halved in the past two years.

“There is some evidence of stabilisation in today’s results – the bank’s net interest margin has remained at 160 basis points against a challenging market, while business lending, customer deposits, and personal lending have grown.

“The integration of CYBG and Virgin also appears to be on track. Nevertheless, there are still challenges ahead for Virgin Money: the mortgage market continues to be tough for most UK banks and, until there is a resolution to Brexit, political uncertainty will likely hang over domestically-focussed lenders.”

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