Virgin Money posts sharp rise in pre-tax profits

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Virgin Money's underlying pre-tax profits rose by 33% last year

Virgin Money has posted a sharp rise in profits on the back of strong growth in its core mortgages, savings and credit card businesses.

The Edinburgh-based bank's underlying pre-tax profit increased by 33% last year to £213.3m.

Gross mortgage lending was up 12%, at £8.4bn, giving the bank a 3.4% share of the UK mortgage market.

However, its impairment charges rose by £7.3m to £37.6m, with most of the rise coming in its credit card business.

The bank said that reflected increased credit card lending, which climbed by 55% to £2.4bn.

Meanwhile, retail deposit balances were up by 12%, at £28.1bn.

Virgin Money's overall customer base increased at a rate of more than 35,000 customers per month, to reach 3.3 million.

The lender said that rise was driven "predominantly" through digital channels.

Chief executive Jayne-Anne Gadhia said: "We continue to target high-quality lending growth and the combination of strong new mortgage lending and improved customer retention resulted in 17% growth in mortgage balances to £29.7bn, significantly outpacing the market.

"Our credit card business continues to flourish and 55% growth in prime credit card balances to £2.4bn means we remain well-placed to reach our target of £3bn high-quality credit card balances at the end of 2017.

"The performance of our Essential current account was particularly strong and customer balances increased more than fivefold over the year."

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