Virgin Money's new owner Nationwide has spent nearly £700m on the business since it closed a £2.9bn takeover of the challenger bank in October.
New preliminary results for the building society show costs of £698m associated with the Newcastle-based lender, including investment in its customer service operation and on integrating the businesses. The move has created 370 new jobs in Virgin Money's contact centre and online chat functions in Gosforth and Glasgow, which Nationwide bosses say has significantly improved customer service levels.
Nationwide CEO Debbie Crosbie said it had been an "outstanding" year for the group in which it had returned a record £2.8bn to members and recorded its highest ever year for growth in mortgage lending - a 16.3% rise to £44.7bn. Statutory profit before tax increased to £2.3bn in the year to the end of March, 2025, from £1.7bn, though underlying pre-tax profit fell to £1.8bn from £2bn.
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Separate numbers for the Virgin Money business showed underlying pre-tax profit of £44m since October 1 which included the raised expenses. Underlying income was £906m, including £842m of net interest income.
Meanwhile underlying credit impairment charges were £164m, with bosses saying the quality of mortgage, consumer and business lending being stable since the beginning of October. That number excluded £456m of one-off charges related to the acquisition of Virgin Money.
The joining together of Nationwide and Virgin has created the country's second largest mortgage lender, with Nationwide's "branch promise" being extended to 91 Virgin branches across the country. Together with 605 Nationwide branches they will remain open until at least January 1, 2028.
Ms Crosbie told journalists there are no plans change the current size of Virgin money's Newcastle headquarters, or to change workforce levels in the short to medium term, as the Nationwide and Virgin brands would continue to be run separately from a customer point of view. A strategic review is under way which will decide the future shape of the Virgin business, with Nationwide having previously said the brand will be phased out over a six-year period.
Muir Mathieson, group chief financial officer at Nationwide, said: "Our financial performance has been strong, with statutory profit before tax of £2.3bn and record member value. Total underlying income increased to £5.2bn following the acquisition of Virgin Money, and our overall underlying net interest margin remained stable.
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"Cost discipline is strong, with underlying Nationwide cost growth significantly below the headline level of inflation. Group underlying costs include six months of costs for Virgin Money. Our balance sheet remains robust and well capitalised. Arrears rates are low and stable, and we maintain a peer-leading Group CET1 ratio of 19.1% and leverage ratio of 5.2%."
Nationwide announced a Fairer Share Payment of £100 to more than four million eligible members with a current account and qualifying savings or mortgage.