The lender beat analyst expectations as statutory pre-tax profits jumped from £417m a year earlier.
Mortgage balances were broadly stable at £58.2bn, Virgin Money said in its annual results, with “improved momentum” seen in the second half of the year.
The lender said it had prioritised margin over volume within mortgages and added: “During the final quarter of the year, mortgage spreads had begun to recover as increases in customer rates outpaced changes in swap rates, however, heightened volatility towards the end of the financial year resulted in further pressure on mortgage margins.”
The bank also set aside £52m of provisions for bad loans as the UK economy is set to enter a recession.
In 2023, Virgin said it would be delivering further propositions including mortgage end-to-end digitisation and a refreshed wealth proposition.
Virgin Money: ‘2022 a milestone year’
The lender added that it faced ongoing competitive pricing pressures, particularly in mortgages and expected modest growth in this sector.
David Duffy, Virgin Money chief executive, said: “2022 has been a milestone year for Virgin Money.
“We have good momentum while delivering a strong performance and improved returns for our shareholders.
“We’ve changed the game in purpose-led flexible working to create an engaged, high-performing organisation that’s cost efficient and agile, which will underpin targeted growth through further digital innovation.
“While we have solid credit quality across our lending, we are aware that some customers will have to make difficult decisions in this environment, and we are proactively offering them help and support.”
