Virgin Money hails ‘strong’ Q1

Virgin Money, which is headquartered in Newcastle but employs 200 at its Edinburgh hub in the capital’s St Andrew Square, has hailed a “strong” performance at the start of the year as it posted rising mortgage lending and better-than-expected growth in savings deposits.

The challenger bank said it delivered £200m of net mortgage lending - loans less redemptions - in a “competitive” market during the first three months of the year.

Total mortgage lending stood at £1.4bn, with its overall mortgage book up 10.4 per cent year on year and 0.5 per cent quarter on quarter at £33.9bn.

The lender said growth in retail savings was ahead of expectations as it saw overall deposits rise 7.4 per cent year on year and 1 per cent since the previous quarter to £31.1bn.

Shares lifted 3 per cent after the update.

Chief executive Jayne-anne Gadhia said: “Our customerfocused strategy of growth, quality and returns continues to drive strong business performance. We have also made good progress in delivering on the strategic initiatives we announced last year.”

She added that the lender is also focused on growing assets at the right price and quality in a “competitive” mortgage market.

And the bank, which has more than 3.3m customers, confirmed it remained on track with full-year guidance as it progresses with a business-boosting strategy.

It pushed into small business banking in January in an attempt to narrow the gap with Britain’s biggest lenders when it launched an SME savings account and set sights on securing £5bn of SME deposits within five years.

Virgin Money is also looking forward to additional product launches later in the year, and continues to make “good progress” in the development of its digital bank, Gadhia added. “We remain on track to deliver on the targets we set at the end of last year.”

“We launched our SME deposit account in January and look forward to additional product launches later in the year. We have seen a stronger than expected customer response to the launch of our first Virgin Atlantic frequent flyer cards, demonstrating the strength of customer affinity with the Virgin brand. And we continue to make good progress in the development of our digital bank.

“In March, we announced a new partnership with Aberdeen Standard Investments which we believe will drive significant growth in assets under management.

“In addition to the strategic initiatives, we are focused on growing assets at the right price and quality in a competitive mortgage market and are pleased to report 10.4 per cent year-on-year growth in our mortgage book. We remain on track to deliver on the targets we set at the end of last year.”