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Virgin Money’s mortgage book falls 2% but Q2 applications on the rise
Virgin Money said a “subdued market” was behind the 2% fall in the value of its mortgage book to £56.6bn in the six months to 31 March.
Growth of 5% across Virgin Money’s target lending segments of business and unsecured loans was offset by lower mortgage balances, which kept customer loans stable at £72.7bn.
In its unaudited trading update, the lender said mortgage demand had improved since the start of the calendar year, with application volumes higher in Q2 compared to Q1.
The group anticipates cost pressures from inflation and investment in H2, which it said will only be partially mitigated by its ongoing cost-savings programme.
Virgin Money confirmed it has now completed the roll-out of its premium broker service to 225 mortgage intermediaries, covering around 40% of applications, contributing to a stronger pipeline of recommended cases from those brokers.
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Virgin Money is ‘well-placed to deliver growth’
David Duffy, chief executive, said: “Over the first six months, we have continued to deliver on our strategic ambitions in line with expectations. While we expect there to be headwinds through the second half of the year, we remain well-placed to deliver growth in our target segments.”
The trading update remains unaudited following the resignation of its auditor PricewaterhouseCoopers LLP, which the firm said was necessary due to potential conflicts of interest arising from its acquisition by Nationwide.
The Virgin Money board recently finalised the appointment of Ernst & Young LLP as its new auditor and will announce its interim results for the six-month period ending 31 March 2024 on 13 June 2024, following the conclusion of EY’s review.
Nationwide put forward a proposal to buy Virgin Money for £2.9bn in March.
In an update to the London Stock Exchange at the time, Nationwide said it would offer 220 pence in cash for each Virgin Money share, which comprises 218 pence per share in cash consideration and a proposed dividend of two pence per share to be paid at the end of this financial year.
Virgin Money shareholders are meeting to approve Nationwide’s proposed bid and related matters on 22 May 2024.