Virgin Money’s first half profit plunges 60 per cent on coronavirus loan losses
Virgin Money, formerly CYBG bank, has taken a £164m impairment charge on coronavirus for the first half of 2020 that has sent underlying profit plunging almost 60 per cent.
The figures
Profit before tax slumped 40.5 per cent from £37m in the six months to March 2019 to just £22m in the six months to March 2020, Virgin Money said today.
It came as the bank revealed a £232m impairment charge, of which £164m is related to future loan losses anticipated because of coronavirus. That took underlying profit down to £120m, 58 mper cent lower than the £286m it recorded in the first six months of 2019.
Overall income slipped three per cent year on year to £817m as the bank’s net interest margin narrowed compared to the first half of 2019. The margin dropped nine basis points from 1.71 per cent last year to 1.62 per cent.
And investors suffered a 1.2p loss per share, compared to earnings of 0.2p this time last year.
What Virgin Money said
Chief executive David Duffy said: “The Covid-19 outbreak and its impact on the nation’s businesses and consumers has markedly changed the operating environment, driving an increased impairment charge of £232m against future loan losses and a reduction in underlying profitability.
“While we delivered a resilient performance and continued to make good progress on our self-help strategy in the first half of the year, our primary objective now is safeguarding the health and well-being of our colleagues, customers and communities while also protecting the bank.
“We enter this period from a position of strength, with a defensive loan book and resilient capital position, meaning we are well-placed to help our customers and colleagues through the crisis.
“We have rapidly adapted our operations, products and services and I am extremely proud of how our colleagues have risen to the challenge and continued to provide the very best support and advice to our customers. To date we’ve directly supported over 100,000 retail customers and around 4,500 businesses.”