Publishing its annual results for the 12 months to the end of September, the lender revealed gross mortgage lending of £10.5bn over the period. This means its mortgage book is now worth more than £60.4bn, having grown 1.7 per cent over the last 12 months, giving the bank a market share of around four per cent.
The lender noted that “sustained competition” in the market had pushed pricing below typical back book rates, and argued this had hit Virgin more significantly than other lenders “as we have a less seasoned, shorter duration book”.
As a result, the average yield on the mortgage book dropped 12 basis points, though it noted this was somewhat mitigated by growth in its average mortgage balances.
The competition in the market also dented the lender’s net interest margin, which dropped 12 basis points to 1.66 per cent.
Overall, the bank revealed a statutory loss after tax of £194m, in large part due to paying out £385m for PPI claims, as well as the costs of its merger with CYBG.
David Duffy (pictured), chief executive officer at Virgin, noted the lender had “tempered” its growth in mortgages due to market conditions.
He added: “Our ambition is to deliver the product and service diversity and benefits of a large-scale bank with the customer experience and innovation of the neo banks, and we will also expand our partnership platform to facilitate the delivery of further value-based propositions like GoCompare. We are working on new propositions with a number of the 25-plus other Virgin Group companies and plan to launch reward and loyalty offerings.”