UK lender Virgin Cash has mentioned credit score high quality stays “sturdy” regardless of deterioration within the economic system and prospects having “troublesome selections” to make.
On the similar time, the financial institution famous that with inflation hitting customers’ pockets, spending on necessities jumped this 12 months. Chief government David Duffy mentioned spending on groceries rose round 60 per cent, and vitality invoice spending was up about 57 per cent.
“Whereas we have now strong credit score high quality throughout our lending, we’re conscious that some prospects must make troublesome selections on this setting,” he mentioned.
His feedback got here because the financial institution, which operates beneath the Virgin Money, Clydesdale Financial institution and Yorkshire Financial institution manufacturers, reported full-year outcomes.
Whole working revenue for the 12 months ending September 30 rose 11 per cent to £1.8bn, consistent with analysts’ expectations. Like different UK lenders, that was pushed by rising rates of interest, which hit 3 per cent in the beginning of November.
Virgin’s internet curiosity margin, the distinction between the curiosity it receives on its loans and the speed it pays for deposits, rose to 1.85 per cent from 1.62 per cent in 2021.
Statutory pre-tax earnings elevated 40 per cent to £595mn, forward of expectations of £578mn. Impairments for dangerous loans had been £52mn, a swing from a launch of £131mn taken in 2021 for the coronavirus pandemic however barely shallower than analyst estimates of £79mn.
In its steerage for the 12 months forward, Virgin mentioned that it expects its internet curiosity margin to rise once more.
The lender additionally introduced a dividend of seven.5p per share, and a £50mn extension to a £75mn share buyback introduced in June.
Shares of Virgin Cash rose 10 per cent in early buying and selling in London.
