Virgin Money FY2019 pre-tax losses rise by 41% to £232m after setting aside a further £385m for PPI claims.
Virgin Money FY2019 statutory loss for the 12 months to end September rises by 34% to £194m.
Consequently, Virgin Money is shelving plans to pay a dividend. This is an abrupt U-turn, having said as recently as June that a dividend was on the horizon.
Ongoing margin pressure results in a 12 basis point drop year-over-year in the net interest margin to 1.66%.
Other less than positive metrics include a 10% drop y-o-y in non-interest income.
Virgin Money FY2019 highlights
The bank reports above market growth in retail and business banking segments. In particular, Virgin Money reports customer lending growth of 2.9% y-o-y to £73bn.
Personal lending rises by 16.1% y-o-y to £5bn, driven by credit card growth. Mortgage lending is up by 1.7% to £60.1bn, maintaining a market share of about 4%. Meantime, deposits rise by 4.6% to £63.8bn.
Other highlights include a 2 percentage point drop in the cost-income ratio to 57%. The bank maintains its forecast of £360m of restructuring costs across fiscal years 2019-21. This relates to Clydesdale Bank’s acquisition of Virgin Money in October 2017 and subsequent re-branding under the Virgin Money moniker.
Virgin Money FY2019 future plans
In December the bank is launching Virgin Money’s first digital personal current account. In addition, it will open three new Virgin Money concept stores. The bank is also launching a loyalty and rewards programme featuring a number of Virgin Group companies in 2020. Other 2020 plans include the roll out of a new Virgin Money business account.
Virgin Money is also investing in its new digital disruption hub based in Newcastle. Its aim is to accelerate customer experience and digital functionality improvements. The bank reiterates its target to rank in the top three of the CMA service quality rankings.
Realistically, that goal has to be regarded as a long term aspiration. The latest personal banking service quality rankings were released in August.
Virgin Money’s Yorkshire Bank and Clydesdale brands ranked 9th and 12th in the survey for overall service quality.