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Virgin Money announces Q3 trading and leverage ratio update


Virgin Money announces Q3 trading and leverage ratio update

Trading highlights

  • The Company successfully increased gross mortgage lending during Q3 with mortgage completions 19% higher than the average of the first two quarters. The Company’s mortgage book increased by 3% to £20.9 billion at the end of the quarter.
  • The Company estimates that it took 4.5%1 market share of new mortgage applications in the quarter. In addition, during the period, mortgage asset quality remained strong.
  • During the quarter the Company increased retail deposit balances by over 3% to £21.8 billion, and successfully issued £1 billion of Residential Mortgage Backed Securities.
  • Credit card balances during the quarter remained slightly ahead of the Company’s expectation, ending the quarter at around £1 billion with over £700 million of the credit card balances held on the Company’s balance sheet and approximately £300 million of the credit card balances held by credit card partner MBNA pending transfer to the Company on 30 November 2014.
  • Effective management of mortgage and deposit pricing helped to increase the Company’s underlying Net Interest Margin2 for the nine months ending 30 September 2014. The Company is on track to improve its underlying Net Interest Margin by approximately 5bps for full year 2014, from 143bps for the half year to 30 June 2014.
  • Profitability improved during the quarter with an underlying cost:income ratio in line with the Company’s expectations and impairments performing better than the Company’s expectations.
  • The Company continued to grow underlying Return on Tangible Equity3 during the quarter whilst maintaining robust capital ratios.
  • Customer engagement during the quarter remained strong. The Company was voted “the coolest brand in banking”4, and the Company opened another of its award-winning Lounges in Glasgow in July.


  • The Company continued to make further good progress towards completing the establishment of its in-house credit card operations which are due to be completed before the end of the year.
  • The Company appointed Richard Hemsley as Chief Banking Officer, taking responsibility for the P&L for all business lines (with the exception of credit cards) and for distribution. Richard will join, subject to regulatory approval, in 2015.

Leverage ratio

  • The Company welcomes the announcement today by the Financial Policy Committee of the Bank of England providing further clarity on the leverage ratio framework. As a result, and given its current leverage ratio of 3.8% as at 30 June 2014, the Company believes that it is well positioned with regard to the new leverage ratio framework.

Jayne-Anne Gadhia, Chief Executive Officer said:

“Following a very strong performance in the first half of the year, we have accelerated our growth in the third quarter of the year, while continuing to build a high quality balance sheet to deliver increasing returns to our shareholders.

“One of Virgin Money’s core strengths is our robust capital position and high asset quality. As such we welcome the new leverage ratio framework announced today by the Financial Policy Committee, and are pleased to note that we operate in excess of the recommended requirements.

“In mortgages and savings, we achieved strong growth during the quarter, particularly in terms of new mortgage applications where we took a market share of around 4.5%. We also saw strong growth in our net interest margin and maintained a tight grip on costs despite investing in the build of our credit card and current account platforms.

“Looking to the future, we have a powerful brand, a strong balance sheet, a strong core business franchise and considerable opportunities to continue to extend our product range. The business has performed strongly in 2014 to-date and we are confident that we can continue to deliver progress against our strategy as we continue to grow the business.”

Notes: (1) Company estimate based on CACI data (2) Underlying NIM is calculated excluding the unwind of the discount on acquisition of the credit card portfolio from MBNA and the unwind of fair value adjustments relating to the purchase of Northern Rock (3) Calculated from underlying profit after tax, net of FSCS levy and capital note distributions (4) Coolbrands

Media Contacts:

Virgin Money Press Office:
Brian Giles / Scott Mowbray / Simon Hall
0191 279 4676

FTI Consulting (PR for Virgin Money)Media Contacts:

John Waples 07717 814520 / Laura Ewart 020 3727 1160


About Virgin Money

  • Virgin Money provides savings, mortgages, credit cards, current accounts, pensions, investment and protection products
  • Virgin Money’s business ambition is to make “everyone better off” – this philosophy underpins our approach to business by offering good value to customers, treating employees well, making a positive contribution to society and delivering a profit to shareholders
  • Virgin Money is the official sponsor of the London Marathon, the biggest annual one-day fundraising event in the world. Virgin Money has helped London Marathon runners raise over £¼ billion, including funds raised through Virgin Money Giving the not-for-profit online fundraising service, since 2010.

Virgin Money Holdings (UK) plc - Registered in England and Wales (Company No. 03087587). Registered Office - Jubilee House, Gosforth, Newcastle upon Tyne NE3 4PL.