CYBG warns of ‘uncertain’ market condition despite rise in mortgage lending

The parent company of Virgin Money, CYBG, posted a 1.5 per cent mortgage growth for the first quarter of its financial year, though has warned of uncertain market conditions ahead.

The bank acquired Virgin Money in October last year, and it said mortgages had reached £60bn in the three months to 31 December, which it cited was the result of a strong pipeline and positive customer retention.

Furthermore, its small and medium enterprise (SME) lending business grew by 1.2 per cent to £7.6bn with approximately £600m of drawdowns, which CYBG chief executive officer (CEO) David Duffy said he was “particularly encouraged” about.

“We are well prepared for the start of the RBS Incentivised Switching Scheme and we hope to attract a large proportion of the 120,000 SME customers that RBS are required to switch. We have also recently submitted our application for a grant from the RBS Capability and Innovation Fund, where we believe we offer the strongest case for delivering a genuine boost to competition in the SME market,” he said.

Since the bank has published its figures for Q1 this morning, it’s share price jumped 9 per cent to hit 195p.

Duffy added: “The Group has made a good start to the year and we are making encouraging progress on the initial stages of the three-year Virgin Money integration programme.

“In a highly competitive environment, we have delivered ahead-of-market lending growth for our customers and improved our NIM guidance for 2019. We have also made good progress on cost reductions and have now increased our integration synergy target to £150m.”

However, the CEO added that “market conditions remain uncertain” while the UK awaits the outcome of Brexit negotiations. Despite this, Duffy assured that CYBG will “remain focussed on supporting our customers and delivering against the factors within our control”.

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