The Virgin Money UK PLC (VMUK) share price spiked 10.8% higher after releasing its Q1 fiscal 2024 results but quickly fell back and was almost at breakeven when publishing. The first quarter saw sustained business growth, aligning with the full-year 2024 forecasts. The company experienced targeted growth in its customer lending sector while maintaining a stable deposit mix.
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Mortgage portfolios saw a slight decrease of 0.7% to £57.1 billion in the first quarter due to cautious trading strategies in a subdued market environment. However, there were early indications of market activity rebounding to levels seen in 2019 as of January.
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A notable 3.2% increase in business lending was observed, fueled by solid demand within specific industry sectors, highlighting the company’s strategic focus. Unsecured lending witnessed a 2.8% rise to £6.7 billion in the first quarter, with credit card lending growing by 4.1%, buoyed by increased retail spending and consistent repayment rates.
Deposits increased by 1.0% to £67.3 billion, with the composition of deposits remaining unchanged from the previous quarter. The period also saw an increase in active customer accounts, adding 27,000 net new accounts, raising the total to 3.8 million.
The company successfully transitioned all existing customers of Virgin Money Investments to a new digital platform and introduced a new pension offering that was well received.
Net Interest Margin (NIM) remained stable as the NIM for the quarter stood firm at 189 basis points, mirroring the previous quarter’s figure, despite challenges such as mortgage spread pressure and competitive deposits. The company anticipates NIM resilience throughout the year despite expected rate adjustments.
David Duffy, Virgin Money’s CEO, said: “We have made a positive start to the year, with strong Q1 results in line with our guidance. We’ve delivered growth in new accounts, deposits and target lending segments at stable margins and with ongoing cost efficiencies. We are encouraged by both our customers’ resilience and improving sentiment in the mortgage market as interest rates have peaked. We carry good momentum into 2024 as we continue to successfully execute our strategy.”
Virgin Money UK share price.
The Virgin Money UK share price spiked up 10.83% to trade at 165.45p from Monday’s closing price of 149.28p.
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