Virgin Money business lending increased during lockdown

Virgin Money business lending increased during lockdown

David Duffy, chief executive of Virgin Money

During the three months of lockdown, Virgin Money, the owner of Clydesdale Bank, saw a near six per cent rise in business lending.

On the other hand, personal lending at the bank dropped by 2.7% to £5.2bn, which Virgin Money said was primarily due to lower credit card balances. Customer account balances did increase to £67.7bn, as many bank customers spent less over the course of lockdown.

The lender’s latest trading update has also revealed that Virgin Money offered payment holidays and overdraft extensions to almost 150,000 people and businesses, while it awarded £867m to UK firms through the UK Government’s CBILS loan scheme. 

The Glasgow-based bank’s mortgage portfolio also fell by 1% due to a slowdown in the property market.

Despite the ongoing economic uncertainty stemming from COVID-19, Virgin Money said that trading numbers for the nine months to June 2020 were in line with the board’s expectations.

David Duffy, chief executive of Virgin Money, said: “I am pleased with the way the Group has performed during the pandemic. In a severely disrupted environment we are delivering on what we set out in May; to safeguard the health and wellbeing of our colleagues, customers and communities while protecting the bank. Our Q3 financial results reflect lower demand from consumers due to the pandemic, but strong demand from businesses for Government-supported schemes, with the Group further increasing its provisions to reflect the uncertain economic outlook while maintaining a focus on margin, cost and capital management.

“Our priority remains on offering the right support for our customers in need. We have now granted c.67k mortgage and c.53k personal payment holidays, and we’ve supported c.25k business customers with lending arrangements. We know that things may yet get more difficult for many of our customers, but we are determined to continue to support their needs where we can and to fulfil our role in the economic recovery. I’m proud of the way our colleagues have responded to the significant challenges of recent months, and encouraged by the agility with which we have adapted our operations.”

The bank announced earlier this month that it will resume plans for branch closures in Scotland which it halted due to the coronavirus pandemic. The resumed plans will see seven Clydesdale Bank branches and five Virgin money stores close in Scotland.

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