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Virgin Money reports 41% pretax profit increase to £194m

Virgin Money has reported a very strong year in business, with the Newcastle-based bank hailing ‘market-beating growth’ across its core divisions.

Announcing its results for the year ended 31 December 2016, the company revealed a 41% increase in pretax profits up from £138m last year to £194.4m.

Moreover, underlying profit before tax increased by 33% to £213.3m, up from £160.7m in 2015.

In addition, customer loan balances rose by 19% and its customer base increased by 15% to 3.3m at rate of over 35,000 customers per month, driven predominantly through digital channels.

Virgin Money’s mortgage division performed particularly well, delivering strong growth in customer balances.

Mortgage balances increased by 17% to £29.7bn, while gross mortgage lending grew by 12%to £8.4bn and net mortgage lending rose by 20% to £4.3 bn.

Jayne-Anne Gadhia, Chief Executive at Virgin Money, spoke of her ‘delight’ with the results.

Jayne commented: “Our customer-focused strategy of growth, quality and returns continues to achieve and maintain outstanding customer approval ratings, excellent asset quality and strong financial performance.

“We recorded market-beating growth in our core mortgages, savings and credit card businesses to deliver a 33 per cent increase in underlying profit before tax to £213.3 million and strengthen our underlying return on tangible equity from 10.9 per cent to 12.4 per cent.

“We are confident of sustaining strong asset growth and maintaining our excellent asset quality.”

Looking to the future, Jayne added: “We are excited about the strategic opportunities ahead of us including the build of our digital bank, which will be transformational for the business, and our partnership with Virgin Red, which will give our customers access to great deals from across the broader Virgin Group of companies.

“We will continue to put customers at the heart of everything we do and remain on track to sustain a solid double-digit return on equity in 2017.”

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