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Virgin Money sees slowdown in mortgage lending growth

  • 05/03/2015
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Virgin Money sees slowdown in mortgage lending growth
Gross mortgage lending at Virgin Money increased at a slower pace in 2014 compared to the previous year, rising from £5.6bn to £5.8bn, a rise of 3.5%.

This year’s growth is in contrast to an increase of 12% in lending seen last year when it jumped from £4.9bn to £5.6bn.

Underlying profits before tax at the lender more than doubled to £121.2m in 2014, up from £53.4m, but costs associated with its flotation in November and its acquisition of Northern Rock in 2012 brought statutory pre-tax profits down to £34m.

Mortgage balances at Virgin Money jumped to £21.9bn, up 11.8% against market growth of 1.4%. Despite an increasingly competitive lending backdrop, the provider has achieved a market share of annual gross mortgage lending of over 3%. According to Bank of England data, it took almost 4% market share of mortgages in January.

Mortgage arrears were sustained at low levels of 0.31% over three months compared to the latest industry average of 1.33%.

Some 13,000 mortgage brokers brought business to Virgin Money in 2014 and it was awarded the Five Star Adviser award for intermediary service.

Chief executive Jayne-Anne Gadhia said: “We have made great progress against our objectives to achieve strong growth, maintain our high quality balance sheet and deliver returns to shareholders. We set out to be a credible and effective challenger to the large incumbent banks and I believe we have laid an excellent foundation on which to realise our ambition. We now rank in the top six of all UK net mortgage lenders and are among the highest rated retail banks in the UK by Net Promoter Score.

“Following the progress made in 2014 I am pleased to report that we expect to be admitted to the FTSE 250 on 20 March 2015,” she concluded.

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