Virgin Money said its first-half underlying profit before tax more than doubled to £245m (H1 2020: £120m), as the company returned to statutory profit before tax of £72m.
Underlying profit doesn’t take into account exceptional and non-recurring costs. These costs are not considered to be relevant to the day-to-day running of the business, and therefore do not reflect the underlying operation of the company.
Go deeper with GlobalData
The company’s exceptional items include £49m of restructuring charges, £47m of acquisition accounting unwind, £71m of legacy conduct costs primarily relating to payment protection insurance (PPI), and £6m of other charges.
Statutory profit is the one profit that the company is required to report by law—this includes exceptional items.
Virgin Money’s financial report covers the 6 months to 31 March 2021.
Stronger financial performance against an improving backdrop
Operating costs of £460m reduced 1% YoY but remained stable in the half as cost savings were offset by one-off costs and the impact of higher investment.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe company says it expects stronger H2 reduction given benefit of transformation savings and lower investment.
The impairment charge was lower at £38m given continuing government support reducing the impact of the pandemic on customers.
Deposits grew 1.5% to £68.5bn. there was a strong relationship deposits growth of 12% to £28.7bn across both consumers and businesses.
Overall, the group’s financial performance has improved significantly with lower impairment charges, better capital ratios, and a stronger net interest margin outlook for the year.
Cautious optimism in lower rate environment and subdued economy
“We are cautiously optimistic about the improving outlook as the impact of the vaccination programme in the UK delivers positive revisions to economic expectations,” said chief executive David Duffy.
“We’re continuing to manage through what is still an uncertain economic backdrop, but the bank is well placed, with a strong balance sheet, and through ongoing strategic delivery we have a clear path to long-term, improved sustainable returns.”
