Tuesday 27 July 2021 7:34 am

Virgin Money personal lending up as more people shop with credit cards

Banking group Virgin Money today reported that personal lending and relationship deposits have grown as consumers pick up their credit cards again.

Personal lending grew 2.5% to £5.2bn in the three months to 30 June 2021, driven by more customers using their credit cards to shop.

Relationship deposits increased 3.7 per cent to just under £30bn, though overall deposits decreased slightly by 0.8 per cent to £68bn as the banking group continues to manage the deposit mix and reduce funding costs.

The results were in line with board expectations, according to the company’s official statement.

Virgin Money’s update confirmed an improving UK economic outlook. The news comes as the easing of covid restrictions and the vaccine rollout have, Virgin Money said, resulted in more positive revisions to their expectations.

Stronger GDP growth, lower unemployment, a robust housing market and greater consumer confidence were all cited by the banking group as good indications of an improving outlook for the business.

Virgin’s 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.

Although the company continues to feel the effect of the pandemic in the short term, he said: “We are well placed to grow profitably next year as we play our role to support the UK economic recovery.”