Sentiment boost

Virgin Money sees signs of mortgage improvement

Virgin Money
Virgin Money: improving sentiment (pic: Terry Murden)

Banking group Virgin Money delivered first-quarter figures in line with guidance with expectations that weakness in the mortgage market would be reversed in the coming months.

Mortgage lending fell 0.7% over the three months to 31 December to £57.1bn, and was down 2.2% year on year.

However, the Glasgow and Newcastle based bank noted “improving sentiment” in the market as interest rates have peaked.

It said there are early signs that market activity has improved in January, “increasing back to 2019 levels”.

Business lending rose 3.2% over the quarter to £9.0bn, up 6.7% year-on-year, while unsecured lending was up 2.8% at £6.7bn, up 7.8% year-on-year.

As a result, total customer lending rose 0.1% to £72.8bn, more or less stable with last year. Meanwhile, customer deposits increased by 1.0% to £67.3bn.

Net interest margin (NIM) – the amount it earns in interest on loans compared to the amount it pays out in interest on deposits – was stable over the three-month period at 1.89% “with benefits from structural hedge reinvestment rate and ongoing cards EIR outperformance offset by mortgage spread pressure and deposit competition.”

The company said that NIM should remain “resilient” over the rest of the financial year, even in light of reduced interest-rate expectations.

Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.