Virgin Money UK has affirmed its full-year guidance as it reports stable mortgages and a consistent net interest margin in the third quarter. The financial-services company expects to repurchase approximately £175 million ($223.6 million) in shares for 2023.
Net Interest Margin Holds Steady
Despite tighter new mortgage spreads and deposit migration, Virgin Money UK's net interest margin for the third quarter remained stable at 1.93%, only slightly lower than the 1.94% reported in the second quarter. The company is confident in its guidance for a 1.90% margin for the entire year, anticipating stability in the second half.
Mortgage and Deposit Figures
Mortgages for the third quarter totaled £57.54 billion, a slight decrease from the previous three months' figure of £57.69 billion. Deposits showed a modest increase of 0.4% to reach £67.27 billion.
Strong Customer Lending Performance
Virgin Money UK saw a 0.7% increase in customer lending during the period, reaching £72.57 billion. Business lending also saw moderate growth, rising 1.6% to £8.73 billion, while unsecured lending experienced a 2.4% increase to reach £6.30 billion.
Balance Sheet Strength
The financial-services company reported a transitional common equity Tier 1 ratio of 14.9%, indicating a solid balance sheet strength compared to the 14.7% recorded in the previous quarter.
Share Buyback
Virgin Money UK also initiated a share buyback program with an initial investment of £50 million. Chief Executive David Duffy stated that, given the company's strong capital position, they anticipate further buybacks totaling approximately £175 million for FY23, with additional buybacks expected as they normalize their surplus capital position by the end of next year.
