IRGIN Money today showed that historic issues still haunt the bank as it prepares to embrace a digital future under one brand.
The bank was bought by CYBG for £ 1.7bn in 2018 – in recent times the market value of the new company has been well below that.
Today, Virgin has set aside an additional £ 173million of ‘one-off items’ which include £ 49million in merger costs and £ 71million in ‘driving charges’ mainly related to PPI, the scandal that he seems unable to get rid of.
All the banks are on the rise lately as the economy improves. Virgin made a small profit of £ 72million in the past six months, compared to a loss of £ 7million a year ago on bad debts. It took another depreciation charge of £ 38million, up from £ 232million a year ago.
General manager David Duffy said customers were ready to splurge. “We think there is a desire to come back and spend,” he said.
Shares, over 300p three years ago, have fallen from 11p to 189p today.
Virgin’s net interest margin – the difference between what it pays savers and what it charges borrowers – is 1.6%. A decision by the Bank of England to raise interest rates would increase those narrow margins.
Business loans, a supposed force for the bank, fell 0.6% to £ 8.9 billion.
Duffy added: “We are cautiously optimistic that the outlook is improving as the impact of the UK vaccination program brings positive revisions to economic expectations.”