UK lender Virgin Money, which is led by Irishman David Duffy, raised its margin forecast, helped by higher interest rates and as credit card spending remained above pre-pandemic levels.
Successive rate hikes by the Bank of England and pent-up demand for travel have boosted profits for lenders, enabling them to make more money on borrowing, despite rampant inflation posing a threat to the economy.
Virgin Money’s net interest margin, a key measure of a bank’s underlying profitability, is now expected at 185 basis points for the fiscal year through September 2022, compared with its previous forecast of 175 basis points.
The company, born out of the merger of CYBG and Virgin Money, said the slowdown in its mortgage loans remained stable, but continued to weigh on margins.
The company’s unsecured lending rose 3.8 per cent to £6 billion (€7.2 billion) in the three months to June 30th, with business loans rising marginally to £8.3 billion. – Reuters
