The Virgin Money UK PLC (ASX: VUK) share price will be on watch today following a late announcement on Tuesday.
Over in the United Kingdom, the bank’s London-listed shares climbed over 4% during overnight trade.
What did Virgin Money announce?
Virgin Money’s announcement was in relation to its first quarter performance. According to the release, trading during the first quarter has been in line with expectations.
During the quarter Virgin Money reported customer deposit growth of 1.6% to £64.8 billion.
Also growing was its business lending and its personal lending. They increased 2.5% and 3.7%, respectively, during the first quarter.
Virgin Money’s business lending growth reflected good organic business lending growth and a strong contribution from customers switching from RBS. Whereas its solid personal lending growth was primarily due to high quality credit card growth.
Things weren’t quite as positive for its mortgage book. That fell 0.8% to £59.6 billion during the first quarter.
Finally, the UK-based bank ended the period with a net interest margin (NIM) of 160bps and a CET1 ratio of 13.1%.
Its NIM was in line with its fourth quarter NIM. Management continues to expect a NIM in the range 160 to 165bps in FY 2020. Whereas its CET1 ratio reduced 20bps due to RWA growth from its asset mix and business lending seasonality.
The bank’s chief executive officer, David Duffy, was pleased with the first quarter.
He said: “The Group continues to perform well. In a difficult market, our own performance has remained on track and we continue to make strong progress on our ambition to disrupt the status quo.”
“We are attracting relationship deposits and delivering growth in customer balances across business and personal, while maintaining our discipline in a competitive mortgage market. We have also now delivered on our commitment to lend £6bn to SMEs over the three years to the end of 2019, with £6.5bn lent in total.”
Mr Duffy appears cautiously optimistic on the future.
He said: “While sentiment improved following December’s election result, the UK banking market continues to face competitive pressures and uncertainty over the final Brexit settlement. However, we continue to focus on supporting our customers in their everyday lives, delivering on our strategic priorities and meeting our medium-term financial targets.”
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.