Virgin Money provisions for bad debts have soared from £21m to £144m for the six months to end March 2023. On the other hand, Virgin Money reports a 10% in total income. Improved margins result in a 8 basis points rise y-o-y in the bank’s net interest margin.

David Duffy, CEO Virgin Money said: “More people are choosing to bank with Virgin Money. While the past six months have seen turbulence in the economy and in the financial system, we have continued to focus on our target areas, growing customer numbers and deposits thanks to our new and existing digital products.

Further customer-centric product launches are coming in the second half of the year. We have a strong capital position and we’ve significantly grown pre-provision profit, while continuing our prudent approach. As the economy stabilises in the months ahead, we have a high degree of confidence in our long-term plans.”

Virgin Money H1 2023 highlights

  • Net interest margin rises by 8 basis points y-o-y to 1.91%
  • Total income up 10% reflects 9% growth in net interest income and positive fair value movements benefitting non-interest income
  • underlying cost-income ratio is down by 3 percentage points y-o-y to 51% 3%pts to 51%;
  • Underlying operating profit before impairment losses of £456m, up 16% on H122.
  • Restructuring charges of £53m broadly stable y-o-y.

Looking ahead, Virgin Money’s outlook remains upbeat. Specifically, the bank now expects to report a full fiscal 2023 net interest margin of around 190 basis points. Moreover, it plans to accelerate its cost saving programme now anticipates a cost: income ratio of 51-52% in FY23.