The bank put its Q1 performance down to a strong pipeline of business generated last year resulting in completions. Annually, this was a 1.7 per cent improvement on its previous balance.
In its trading update which covers the three months to December 2022, it acknowledged that the housing market had been slower and said completion spreads, the profit made on the mortgages sold, were below the levels of its back book during the same period.
Spreads on its front book application improved over the quarter, but Virgin said there were signs of competition returning to the market this year.
Virgin to launch new mortgage platform
Virgin is finalising its investment in a new mortgage platform which would be launched directly to customers first, then to intermediaries.
It claimed this would improve efficiency and customer service by creating a “smooth end-to-end digital process”.
The bank said the platform would extend its market reach and allow it to compete more over the medium term.
Virgin Money’s net interest margin rose by three basis points (bps) to 189bps compared to the previous quarter, which it partially owed to higher interest rates. It expects its net interest margin to remain within the 185 to 190bps range for the rest of the year.
Arrears remained low during the quarter and the bank said it tightened its credit criteria further to improve resilience.
Virgin: ‘A positive first quarter’
David Duffy, chief executive of Virgin Money, said: “We’ve had a positive first quarter with continued good progress on digitisation and growth in lending across the business as more customers choose Virgin Money.
“Arrears remain broadly stable but we’ve increased the support available to those who need it and remain prudently provisioned for an uncertain economic outlook. Looking ahead, we have good financial momentum and a number of exciting digital product launches to come which will support our continued growth.”
