Challenger bank Virgin Money has signalled an improving economic outlook in the 海角视频 which has allowed it to reduce the amount it had set aside to cover bad debts.
The bank - which has major offices in Newcastle, Leeds and Glasgow - was formerly known as CYBG and owned the Yorkshire and Clydesdale banks. It has released a third quarter trading update in which personal lending grew 2.5% as credit card activity increased amid the re-opening of the economy.
Mortgages also nudged up as people rushed to buy houses before the end of the reduced stamp duty period, though business lending fell, partly due to a reduction in Government-backed coronavirus support loans.
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Virgin Money said the rollout of the vaccination programme and the easing of coronavirus restrictions had allowed it to revise up expectations, with stronger GDP growth, lower unemployment and greater consumer confidence all pointing to an improving economy.
It added: “Overall, while risks remain from the increase in Covid case numbers driven by the new variants and the impact of the removal of Government support schemes later in the year, the strengthening backdrop gives scope for greater optimism about the pace of the recovery.”
The improvements in the economy has prompted Virgin Money to reduce its expected credit loss by £19m, adding that there could be a further reduction the £678m of credit provisions levels in full-year 2021 results.
The improvements in the economy has prompted Virgin Money to reduce its expected credit loss by £19m, adding that there could be a further reduction in credit provision levels in full-year 2021 results.
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The group posted a 0.7% rise in mortgage lending to £58.7bn for the three months to June 30, helped by the homebuyer rush to beat the end of full stamp duty relief. It said personal lending grew 2.5% to £5.2bn, driven by credit card usage as consumer spending rose amid easing coronavirus restrictions.
This helped offset a 2.4% drop in business lending as the Government’s Covid-19 support schemes began to wind down. It said Government-backed lending balances fell 3.2% to £1.4bn as some borrowers started to repay, with many of these emergency loans now becoming due.
In the trading update, Virgin Money said it was continue to adapt its working model to put more emphasis on flexible working.
It also highlighted the launch of its first greener mortgage and a sustainability-linked business loan for companies working in the transition to a greener economy.
Chief executive officer David Duffy said: “Virgin Money performed well as our strategy continued to translate into improved financial delivery in a strengthening environment.
"We carried our momentum of relationship deposit growth into the second half, reducing our cost of funds. Our asset quality remained robust, while capital ratios improved further.
“The positive reaction to our switching incentives and product launches reflects our focus on transforming customer experience, backed by the unique advantages of one of the world’s most-recognised brands. We have also advanced our ESG agenda with our first greener mortgage product and sustainability-linked business loans.
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“We have increased full-year NIM guidance and, while Covid continues to impact the near-term, we have a strong capital position and robust provisions.
“We see great opportunities from further developing our digital capabilities to deliver an improved customer experience and greater efficiencies. We are well placed to grow profitably next year as we play our role to support the 海角视频 economic recovery.”
The figures come ahead of a busy week for bank results, with Lloyds Banking Group, Barclays, Santander and NatWest all reporting interim figures.