Newcastle bank Virgin Money has said the impact of the coronavirus on the 海角视频 economy may not be known for some time and is preparing for many of its customers going into financial difficulty.
The bank has issued third quarter results which showed that it offered payment holidays and overdraft extensions to almost 150,000 people and businesses, while it granted £867m in Government-backed loans to companies in difficulties.
But it also saw the money in people’s accounts rise by an average of around £600 as the lockdown saw people spending less.
In its third quarter trading update, the bank outlined how it had set aside £42m in readiness for the possibility of bad debts, but was also keeping a close eye on how the economy fared as the country emerged from lockdown.
A statement from the bank said: “The 海角视频 economy is emerging from lockdown and we have seen increased consumer spending and economic activity in recent weeks.
“However the economic outlook remains highly uncertain and it may be some months before the full extent of the impact of the lockdown on the group’s customers is visible, once Government and other support measures are withdrawn.
“The group has set provisions based on cautious economic assumptions, is preparing assiduously to manage higher levels of customers in financial difficulty and continues to closely monitor the performance of its portfolios.
“In addition, as previously indicated, the group continues to work through the impact of the pandemic on our strategy and will update the market in more detail alongside its full year results in November.”
Most Read
Virgin Money halted a plan for branch closures and head office job losses at the start of the pandemic, but announced at the start of July that the programme would be re-started.
It had initially planned to cut 500 jobs – including 60 at its offices in Gosforth, Newcastle – and close or merge 52 branches across the country. The job loss figure has been reduced by 200 due to changes made in response to the panedemic and it has told staff affected by branch closures that they can remain with the group until October 20 to help offer support to vulnerable customers.
In the trading update, Virgin Money chief executive David Duffy said: “I am pleased with the way the group has performed during the pandemic.
“In a severely disrupted environment we are delivering on what we set out in May; to safeguard the health and wellbeing of our colleagues, customers and communities while protecting the bank. Our Q3 financial results reflect lower demand from consumers due to the pandemic, but strong demand from businesses for Government-supported schemes, with the group further increasing its provisions to reflect the uncertain economic outlook while maintaining a focus on margin, cost and capital management.
““Our priority remains on offering the right support for our customers in need. We have now granted c.67k mortgage and c.53k personal payment holidays, and we’ve supported c.25k business customers with lending arrangements.
“We know that things may yet get more difficult for many of our customers, but we are determined to continue to support their needs where we can and to fulfil our role in the economic recovery. I’m proud of the way our colleagues have responded to the significant challenges of recent months, and encouraged by the agility with which we have adapted our operations.”