Virgin Money pledges support for customers after 'positive' quarter and strong credit card demand

Virgin Money, the Glasgow-headquartered banking group, has seen little sign of financial stress among customers as higher interest rates drove up the lender’s profit margins.

The group, formerly known as CYBG, the owner of the historic Clydesdale and Yorkshire bank names, also reported a rise in customers opening new accounts, with particular growth in demand for credit cards.

It highlighted a 45 per cent rise in personal and business accounts compared to last year, and said 160,000 new credit cards were opened in the three months to the end of June.

Margins were boosted by higher interest rates, with the firm raising its net interest margin forecast for the full financial year.

However, ongoing competition in the mortgage market offset returns somewhat as buyers shopped around for the best deal.

Chief executive David Duffy said there were limited signs of credit concerns among customers but assured the business is ready to support people as higher living costs could lead to affordability issues.

“Virgin Money has had another positive quarter, financially and strategically,” he said. “Looking out into an uncertain economic environment, while our asset quality remains resilient and customers aren’t yet showing signs of financial stress, we are helping our customers and colleagues navigate what will be a more difficult period for many.”

Shore Capital analyst Gary Greenwood noted: “After the panic around guidance and associated share price weakness after the interims, the net interest margin appears to be holding up better than consensus expected while the group has since commenced a share buyback.”