TIDMVM.
RNS Number : 7434T
Virgin Money Holdings (UK) PLC
17 October 2017
VIRGIN MONEY HOLDINGS (UK) PLC: Q3 2017 TRADING UPDATE
Key Highlights
* Profitability, earnings and underlying RoTE in line
with expectations
* Further improvement in overall Net Promoter Score
(NPS) to +40, up from +29 at the end of 2016, making
Virgin Money one of the best-rated retail banks for
customer satisfaction
* Gross mortgage lending of GBP6.5 billion to the end
of Q3, a market share of 3.5 per cent(1)
* Net mortgage lending of GBP3.2 billion, a market
share of 10.0 per cent(1)
* Credit card balances of GBP2.9 billion with stable
customer behaviour
* Banking NIM(2) consistent with FY 2017 guidance
* Continued stable credit performance across mortgages
and cards
* FY 2017 CET1 ratio expected to be around 13.5 per
cent
* Full year guidance reaffirmed.
-----------------------------------------------------------------
Jayne-Anne Gadhia, Chief Executive Officer said:
"Our low risk business model and customer-focused strategy
continues to deliver excellent results and I am delighted with the
ongoing momentum of the business."
"The UK housing market continues to prove resilient and in a
competitive mortgage market we remain focused on growing assets at
the right price and quality. Our prime credit card business is
developing as planned and, as a responsible lender, the strict and
consistent application of underwriting standards supports a low and
stable cost of risk as well as resilience in the future."
"Ensuring that our customers are always at the heart of our
strategy has seen our overall Net Promoter Score improve to +40 in
2017, making Virgin Money one of the best-rated retail banks in the
UK for customer satisfaction. I am delighted that more customers
than ever before would recommend us to their friends and
family."
"The strength of our core business and our focus on doing the
right thing for customers, combined with our exciting plans for the
future, gives us real conviction in our longer term prospects. We
look forward to saying more about our plans for the future at our
investor update on 16 November."
Business review
As at 30 September As at 31 December
2017 2016
(GBP million) (GBP million)
------------------- ------------------- ------------------
Mortgage balances 32,918 29,741
------------------- ------------------- ------------------
Credit card
balances 2,889 2,447
------------------- ------------------- ------------------
Deposit balances 30,031 28,106
------------------- ------------------- ------------------
(1) Based on Bank of England data to the end of August 2017
(2) Banking NIM is defined as Net Interest Income over customer
average interest earning assets. Further alternative performance
measures (APMs) are used within this analysis of the Group's
financial performance and position. Details of all APMs including
the rationale for their use and their bases of calculation are set
out on page 59 of the 2017 Group Half Year News Release and page
267 of the Group 2016 Annual Report and Accounts.
Mortgages
* Gross lending of GBP6.5 billion to the end of Q3
represented a market share of 3.5 per cent(1)
* Net lending of GBP3.2 billion to the end of Q3
represented a market share of 10.0 per cent(1)
* Balances increased by GBP1.1 billion during the
quarter to GBP32.9 billion with a pipeline of GBP1.9
billion at the end of Q3 2017
* Asset quality remained strong and consistent with the
first half of the year
* Market-beating mortgage intermediary NPS at +61, from
+55 at the end of 2016.
--------------------------------------------------------------------
Credit cards
* Balances increased by GBP0.1 billion during the
quarter to GBP2.9 billion with stable customer
spending patterns and arrears levels
* Asset quality remained strong with cost of risk
improving modestly from H1 2017.
--------------------------------------------------------------------
Funding
* Deposits increased by GBP0.5 billion during the
quarter to GBP30.0 billion
* TFS drawings temporarily reduced to GBP4.2 billion at
30 September 2017
* Successfully completed a further Gosforth RMBS issue
raising around GBP750 million between USD and GBP
tranches.
Profitability and capital ratios
* Profitability, earnings and underlying return on
tangible equity in line with expectations
* Banking NIM(2) and total NIM consistent with FY 2017
guidance
* Capital ratios remain well above minimum regulatory
requirements. FY 2017 CET1 ratio expected to be
around 13.5 per cent
* Costs in line with expectations and the cost:income
ratio further improved
* Cost of risk stable and consistent with full year
guidance.
--------------------------------------------------------------------
2017 Outlook
* The UK economy remains supportive with low
unemployment and a resilient housing market. We are
experiencing robust customer demand with stable
customer behaviour
* The mortgage market remains competitive. Nimble
approach to distribution and pricing coupled with
intermediary service proposition enables the
optimisation of returns while managing volume within
the guided range of 3.0-3.5 per cent share of gross
mortgage lending
* In credit cards, continue to prioritise asset quality
over balance growth and remain on track to achieve
GBP3 billion of prime credit card balances by the end
of the year
* FY 2017 Banking NIM and total NIM expected to be in
line with prior guidance
* Full year guidance for 2017 reaffirmed.
-------------------------------------------------------------------------
Analyst and investor call
An analyst and investor call will be held as
follows:
Date: Tuesday 17 October 2017
Time: 9.30am
Dial: +44 20 3059 8125
An operator will assist you in joining the call.
---------------------------------------------------
Enquiries:
Virgin Money Press Office
Scott Mowbray / Simon Hall
0191 279 4676 or press.office@virginmoney.com
FTI Consulting
John Waples / Mitch Barltrop
07717 814520 / 07807 296032
john.waples@fticonsulting.com /
mitch.barltrop@fticonsulting.com
Virgin Money Investor Relations
Adam Key
020 7111 1311 or adam.key@virginmoney.com
NOTES TO EDITORS
-- Virgin Money will be hosting a capital markets day on 16
November 2017. This will be an opportunity for analysts and
investors to hear more about our strategy for the business,
including the development of the digital bank.
About Virgin Money
-- Virgin Money offers savings, mortgages, credit cards, current
accounts, currency services, pensions, investments and protection
products to customers across the UK
-- Virgin Money's business ambition is to make "everyone better
off" - this philosophy underpins our approach to business by
offering good value to customers, treating employees well, making a
positive contribution to society and delivering a profit to
shareholders
-- More than 13,500 charities have registered with Virgin Money
Giving and, by the end of Q3 2017, over GBP590 million had been
raised for charity through the service since its launch in 2009,
resulting in an estimated GBP18 million more raised for charity
because of its not-for-profit model.
Note: all figures contained in this trading update are
unaudited
Alternative performance measures.
The Group uses a number of alternative performance measures, in
the discussion of its business performance and financial position.
Further information on these measures is set out on page 267 of the
Annual Report and Accounts 2016.
Forward looking statements
This document contains certain forward looking statements with
respect to the business, strategy and plans of Virgin Money Group
and its current goals and expectations relating to its future
financial condition and performance. Statements that are not
historical facts, including statements about Virgin Money Group's
or its directors' and/or management's beliefs and expectations, are
forward looking statements. By their nature, forward looking
statements involve risk and uncertainty because they relate to
events and depend upon circumstances that will or may occur in the
future. Factors that could cause actual business, strategy, plans
and/or results to differ materially from the plans, objectives,
expectations, estimates and intentions expressed in such forward
looking statements made by the Group or on its behalf include, but
are not limited to: general economic and business conditions in the
UK and internationally; inflation, deflation, interest rates and
policies of the Bank of England, the European Central
Bank and other G8 central banks; fluctuations in exchange rates,
stock markets and currencies; the ability to access sufficient
sources of capital, liquidity and funding when required; changes to
Virgin Money's credit ratings; the ability to derive cost savings;
changing demographic developments, including mortality, and
changing customer behaviour, including consumer spending, saving
and borrowing habits; changes in customer preferences; changes to
borrower or counterparty credit quality; instability in the global
financial markets, including Eurozone instability, the exit by the
UK from the European Union (EU) and the potential for one or more
other countries to exit the Eurozone or EU, and the impact of any
sovereign credit rating downgrade or other sovereign financial
issues; technological changes and risks to cyber security; natural
and other disasters, adverse weather and similar contingencies
outside Virgin Money's control; inadequate or failed internal or
external processes, people and systems; terrorist acts and other
acts of war or hostility and responses to those acts; geopolitical,
pandemic or other such events; changes in laws, regulations,
taxation, accounting standards or practices, including as a result
of the exit by the UK from the EU, regulatory capital or liquidity
requirements and similar contingencies outside Virgin Money's
control; the policies and actions of governmental or regulatory
authorities in the UK, the EU, the US or elsewhere including the
implementation and interpretation of key legislation and
regulation; the ability to attract and retain senior management and
other employees; the extent of any future impairment charges or
write-downs caused by, but not limited to, depressed asset
valuations, market disruptions and illiquid markets; market
relating trends and developments; exposure to regulatory scrutiny,
legal proceedings, regulatory investigations or complaints; changes
in competition and pricing environments; the inability to hedge
certain risks economically; the adequacy of loss reserves; the
actions of competitors, including non-bank financial services and
lending companies; and the success of Virgin Money in managing the
risks of the foregoing.
Any forward-looking statements made in this document speak only
as of the date they are made and it should not be assumed that they
have been revised or updated in the light of new information of
future events. Except as required by the Prudential Regulation
Authority, the Financial Conduct Authority, the London Stock
Exchange plc or applicable law, Virgin Money expressly disclaims
any obligation or undertaking to release publicly any updates of
revisions to any forward-looking statements contained in this
document to reflect any change in Virgin Money's expectations with
regard thereto or any change in events, conditions or circumstances
on which any such statement is based.
Virgin Money Holdings (UK) plc - Registered in England and Wales
(Company No. 03087587). Registered Office: Jubilee House, Gosforth,
Newcastle upon Tyne NE3 4PL.
This information is provided by RNS
The company news service from the London Stock Exchange
END
TSTQQLFFDBFLFBD
(END) Dow Jones Newswires
October 17, 2017 02:00 ET (06:00 GMT)
Virgin Money (LSE:VM.)
Historical Stock Chart
From Apr 2024 to May 2024
Virgin Money (LSE:VM.)
Historical Stock Chart
From May 2023 to May 2024