UK lender Virgin Money sticks to annual outlook despite mortgage pressures
(Reuters) -British challenger bank Virgin Money UK on Wednesday maintained its full-year outlook and reported stable net interest margin (NIM) in the third quarter despite pressure from its mortgages business.
Virgin Money has been restructuring itself as it grapples with a drop in footfall and transaction volumes. The lender said it was now accelerating its restructuring activity, including a 30% reduction in its store network.
Third-quarter NIM – a key measure of profitability – dipped one basis point (bp) from the prior three months to 193 bps, it added.
Virgin Money said higher interest rates were offset by spread pressure in mortgages and continued deposit migration.
“The Group expects housing activity to remain muted in the near term, given the implications of higher rates, and will continue to focus on supporting existing customers and managing mortgage profitability considering the current challenging trading conditions,” it said.
The London-listed lender also announced its plans to buyback shares worth 175 million pounds ($159.58 million) in fiscal year 2023 and more in 2024.
($1 = 0.7833 pounds)
(Reporting by Yadarisa Shabong in Bengaluru; Editing by Rashmi Aich)