Virgin mortgage lending up 44pc

Sarah Davidson

July 28, 2015

The challenger bank’s share of the gross lending market stood at 3.8% and its net lending market share reached 20.5% at the end of May 2015.

Mortgage loans over three months in arrears accounted for just 0.25% of its overall book compared with the latest industry average of 1.3%.

The lender also confirmed it has diversified its funding through a successful residential mortgage securitisation valued at £750m.

However, the challenger bank warned that George Osborne’s bank surcharge announced in the Tory budget earlier this month was “expected to slow…progress to mid-teens returns on tangible equity”. The bank now expects to achieve this by the end of 2017.

Jayne-Anne Gadhia, chief executive of Virgin Money, said: “I am pleased to report a 37% increase in underlying profit for the first half of 2015. This was driven by balance sheet growth, strong improvement in our net interest margin and effective cost management.

“We continued to increase our share of the mortgage market while protecting the quality of our book.

“We remain focused not only on delivering growth but also generating sustainable returns to shareholders.

“As such, we are pleased to announce that, after taking into consideration our strong performance in the first half of the year and the growth prospects of the company, the board has declared an interim dividend of 1.4 pence per share.”

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