Virgin Money reports 2% fall in H1 mortgage lending

Virgin Money has reported a 2% fall in mortgage lending to £56.6bn for the first six months of its financial year, after citing a “subdued market” in H1.

The lender did note that customer demand had more recently seen an uptick, with mortgage application volumes higher in Q2 than they were in Q1.

Across the group, Virgin Money said it had continued to deliver “business momentum” in the half-year to March 2024, with the lender’s loan book stable in H1 at £72.7bn.

The bank also oversaw a 7% increase in business lending to £9.3bn, driven by strong demand in sector specialisms, as well as 3% growth in unsecured lending to £6.7bn, driven by a 5% rise in credit card lending.

“Over the first six months, we have continued to deliver on our strategic ambitions in line with expectations,” Virgin Money CEO, David Duffy, said.

“While we expect there to be headwinds through the second half of the year, we remain well placed to deliver growth in our target segments.”

Virgin Money is expecting its net interest margin (NIM) for H1 to be at the upper end of its 190 to 195 bps guidance for the 2024 financial year.

However, the group warned it is expecting downward pressure on NIM in H2, reflecting a lower contribution from credit cards and ongoing competition, while the bank is also anticipating cost pressures from inflation and investment.

Virgin Money will also move nearer its takeover by Nationwide in H2, with the £2.9bn deal anticipated to be the biggest UK bank takeover since the 2008 financial crisis.

Amid the proposed Nationwide acquisition, Virgin Money has cancelled its share buyback programme and confirmed it does not intend to announce any further share buybacks or dividends.

Virgin Money shareholders are due to meet next week (22 May) to vote on whether to accept the Nationwide takeover, though directors at the bank have already approved the deal.

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