Virgin Money UK PLC reduces mortgage lending as competition hots up
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Total lending fell to £71.6bn, with a reduction in business loans as well as mortgages
Virgin Money UK said it had continued to rein back mortgage lending as the market gets increasingly competitive
The house loans book fell by 0.5% to £57.8bn in the three months to end December, its first quarter.
Demand had weakened after the end of the covid stamp duty holiday with the pricing of new mortgages below previous levels.
VMUK added it remained selective throughout the period in its mortgage lending, ‘balancing volumes and pricing carefully’.
Total lending fell slightly to £71.6bn, with a reduction in business loans as well as mortgages through credit card activity picked up with a 3% rise to £5.6bn in unsecured loans.
The group has been cutting branches as it switches towards digital banking with 28 closed since 2021 and taking the total number to 134.
The cost of the restructuring is expected to be £275mln over the next three years.
Virgin Money added its lending mix has become more profitable due to the operational changes, hedging and lower savings rates with the forecast for net interest margins this year raised to 1.72%.
David Duffy, chief executive, said: “Virgin Money’s performance in the first quarter has been strong. Our balance sheet is performing well, asset quality remains robust and we have increased guidance on net interest margin for 2022.
“We are optimistic about the pace of recovery of the UK economy based on growing consumer and business confidence, underpinned by lower unemployment.”
“We’ve continued our strong delivery of new digital propositions, including the launch of our fee-free digital business current account and innovative new unsecured lending products, with more to come later this year.”
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