Virgin Money UK performance as expected ahead of buyout by Nationwide
Virgin Money UK PLC on Friday said its lending declined in the past three months, amid lower mortgage balances.
The Newcastle upon Tyne-based lender said it performed in line with guidance in its financial third quarter, as its takeover by Nationwide Building Society nears.
Its net interest margin in the third quarter to June 30 edged down to 1.89% from 1.93% year before. It was down from the 1.94% achieved in the first half of the current financial year.
‘Our strategy remains on track, with financial performance in line with guidance. We delivered continued growth in deposits and unsecured lending in Q3 and remain focused on developing innovative new products for customers and maintaining good momentum into Q4. The acquisition by Nationwide is progressing as anticipated with the recent CMA clearance, and we expect it to complete in the final quarter of the calendar year,’ Chief Executive Officer David Duffy said.
Customer loans declined 0.7% on-year to £72.05 billion from £72.57 billion, ‘reflecting lower mortgage balances’, Virgin Money explained. Mortgage lending fell 2.7% to £56.01 billion from £57.54 billion.
Business lending, however, rose by 5.6% and unsecured lending jumped 8.2%.
For the full-year, Virgin Money still expects a net interest margin in the range of 190 to 195 basis points, compared to 191 bps in 2023.
Further, it continues to anticipate return on tangible in the second half of 2024 to be lower than the 9.1% reported in the first half.
Virgin Money agreed to a £2.9 billion takeover from building society Nationwide in March. The deal was cleared by the UK competition regulator last month and received the support of Virgin Money shareholders. It wasn’t put to a vote of Nationwide members, as this wasn’t required by the rules of building societies.
Virgin Money on Friday said it expects the takeover to complete in the fourth quarter of calendar 2024.
Virgin Money shares were flat at 215.20 pence each on Friday morning in London.
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