Reporting its six-month interim results for Virgin Money, Clydesdale Bank and Yorkshire Bank, the group said lower demand for lending was down to higher rates, affordability pressures and cost-of-living considerations that had been outpaced by repayments and redemptions.
Breaking the group’s lending down into segments, £33.5bn was advanced to homeowners with capital and interest mortgages with an average loan to value (LTV) of 56%. A further £7.2bn was lent to residential interest-only households at 49% LTV on average and the remaining £14.6bn went to buy-to-let (BTL) borrowers with an average LTV of 55%.
Year-on-year falls in the six-month lending performance were spread evenly across the segments.
Fixed rates dominate
Just over 90% of the group’s borrowers are on a fixed rate, with 5.7% on a variable rate and 3.3% on the standard variable rate (SVR).
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The group described the 12-month period to 30 September as a “solid overall performance”, which it said was evidenced by an increase of 68% in profits after tax from £249m in the previous year to £419m.
It added: “This performance coincided with the acquisition process of Virgin Money by Nationwide, which completed on 1 October 2024. While overall financial performance improved, the acquisition did have some impact during the six-month period to 30 September 2024, most notably as the group incurred transaction-related costs and paused restructuring activity.”
