Lender Virgin Money has set aside a total £726 million (€824 million) for 2020 to protect its balance sheet from potential loan losses, as it reported a “modest” increase in the number of customers needing additional support after exiting pandemic payment holidays.
The UK's sixth-largest lender, which is led by Irishman and former AIB chief executive David Duffy, was set up to challenge the dominance of more conventional and bigger banks in the region.
It said on Tuesday it had granted mortgage payment holidays on £12.1 billion (€13.7 billion) of loans as at December 31st, equivalent to around 21 per cent of balances, compared with £11.9 billion (€13.4 billion) at its full-year.
Payment holidays
“The great majority of people – whether it was credit cards or personal loans – who are on payment holidays have resumed payment. And in the business book we’ve not seen any material losses or impairments,” Mr Duffy told Reuters. “But we still remain cautious because we haven’t seen the consequences of the pandemic yet, and that will be more visible later on.”
Mr Duffy said he expected the true impact of the pandemic on customer finances to become clearer in the second half of this year and the first half of 2022, if government pandemic support schemes are wound down.
Virgin Money also posted a 0.3 per cent fall in the size of its loan book to £72.2 billion during its first quarter, as fresh coronavirus restrictions put pressure on customer borrowing. – Reuters
