Virgin Money has continued to increase its share of the UK mortgage market after reporting a 34 per cent leap in lending for the first quarter.
The group, which celebrated its 20th anniversary in March, captured an estimated 3.6 per cent share of a declining market, with gross mortgage lending of £1.6 billion in the three months to the end of March.
We can continue to build on the strong foundationsJayne-Anne Gadhia
It has also started the current quarter with a strong pipeline due to the high number of mortgage applications received in the first quarter.
In March, Virgin targeted a market share above 3 per cent, having achieved 3.1 per cent in the second half of last year.
Credit card balances stood at more than £1 billion at the end of the quarter following the migration of about 675,000 MBNA credit card accounts in March. The credit card business is now fully operational on Virgin’s own platform as the group targets £3bn of credit card balances by the end of 2018.
The roll-out of its Essential current account has now taken place across all its 75 stores, most of which were inherited following its Northern Rock takeover.
It hopes the outcome of an ongoing competition investigation into the banking sector will leave it well placed to attract more current account business.
Chief executive Jayne-Anne Gadhia said yesterday: “In the first three months of 2015, we have continued on our trajectory of growth while retaining a high-quality balance sheet.
“I am particularly pleased that we successfully completed the migration of the credit cards we acquired from MBNA to our own platform and have launched our proposition to customers.
“We are confident that we can continue to build on the strong foundations we have laid for the business, and remain focused on delivering growth, quality and returns for the benefit of all of our stakeholders.”
Vigin Money, which is backed by founder Sir Richard Branson and US financier Wilbur Ross, employs more than 2,500 staff, with 1,700 based in Gosforth, Newcastle, and key operations in Edinburgh and Norwich.
The lender, which listed towards the end of last year, has been looking to challenge Britain’s dominant players – Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland. Spanish outfit Sabadell’s offer for TSB Banking Group – a rival to Virgin Money – has fuelled talk of possible consolidation among smaller banks.
However, Gadhia declined to speculate on any possible acquisitions.
Ian Gordon, an analyst at brokerage Investec Securities, said: “Virgin Money is (remarkably) 20 years old, albeit prior to its acquisition of Northern Rock on 1 January 2012 it had a fairly limited profile.
“All that is changing, and [this update] describes a quarter of strong mortgage-led growth, broadly consistent with guidance at FY14 results on 5 March.”
Investec has a “hold” recommendation on shares in Virgin money.