Virgin Money claws back more bad debts as UK economy improves

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() said it had clawed back more bad debt provisions as the UK economy reopens after Covid-19 while it also raised its guidance on margins.

The group released £19mln of impairment charges in the third quarter of its fiscal year to end of September, with the balance sheet total dropping to £678mln (£721mln).

VMUK added that if the current situation continues it might be able to release more provisions with the full-year results.

Net interest margin (NIM) also rose slightly to 1.68% and for the year as a whole VMUK expects it now to exceed 1.6% with lower deposit rates offsetting competition and wholesale funding costs. 

Mortgage lending increased by 0.7% to £58.7bn, while personal lending recovered by 2.5% to £5.2bn as credit card spending activity picked up again after lockdown.

Deposits dropped slightly to £68bn.

The bank reiterated it would consider the level of dividend payments once the next set of government stress tests has been completed.

David Duffy, chief executive, added:  “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.”

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