Virgin Money share price jumps as it reports increased lending and deposits

 
Caitlin Morrison
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Virgin Money sponsors the London Marathon (Source: Virgin Money)

Challenger bank Virgin Money has reported an increase in its credit card and mortgage balances during the three months to 30 September.

The figures

In the third quarter, Virgin Money said it increased mortgage balances by £1.1bn to £33bn, with gross lending of £6.5bn.

Cedit card balances for the period rose to £2.9bn, a £100m increase.

Deposit balances were up by £500m to £30bn.

Shares in the bank were up 3.6 per cent in early trading.

Why it's interesting

The company said the mortgage market remains competitive - borne out by figures released during the third quarter showing approvals were at a 16-month high. The group's "nimble approach to distribution and pricing coupled with intermediary service proposition" helped it hold its own in tough conditions, and Virgin Money said net lending of £3.2bn represented a market share of 10 per cent.

Investors were seemingly pleased with today's update - this is in contrast to a plunge in the stock after the half-year results were revealed in July, when the bank's boss was forced to defend her "safe, low-risk" company as income and capital missed expectations.

What Virgin Money said

"Our low risk business model and customer-focused strategy continues to deliver excellent results and I am delighted with the ongoing momentum of the business," said chief exec Jayne-Anne Gadhia.

"The UK housing market continues to prove resilient and in a competitive mortgage market we remain focused on growing assets at the right price and quality. Our prime credit card business is developing as planned and, as a responsible lender, the strict and consistent application of underwriting standards supports a low and stable cost of risk as well as resilience in the future.

"The strength of our core business and our focus on doing the right thing for customers, combined with our exciting plans for the future, gives us real conviction in our longer term prospects."

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