Skip to main content

David Duffy, Chief Executive Officer:

“Our strategy remains on track, with financial performance in line with guidance. We delivered continued growth in deposits and unsecured lending in Q3 and remain focused on developing innovative new products for customers and maintaining good momentum into Q4. The acquisition by Nationwide is progressing as anticipated with the recent CMA clearance, and we expect it to complete in the final quarter of the calendar year.”

Summary financials
Q3 2024
H1 2024
Change
Q3 2023
Change
Key growth metrics (£'m)
Mortgages
56,012
56,627
(1.1)%
57,544
(2.7%)
Business
9,219
9,321
(1.1)%
8,730
5.6%
Unsecured
6,817
6,727
1.3%
6,300
8.2%
Customer lending
72,048
72,675
(0.9)%
72,574
(0.7)%
Customer deposits
69,827
68,184
2.4%
67,266
3.8%
Key performance metrics
Net interest margin (NIM)
1.89%
1.94%
(0.05)%
1.93%
(0.04)%
Adjusted cost:income ratio (CIR)1
54%
52%
(2)%
51%
(3)%
Cost of risk (CoR)
25bps
26bps
1bps
30bps
5bps
Transitional Common Equity Tier 1 (CET1) ratio
14.4%
14.6%
(0.2)%
14.9%
(0.5)%

Overview

Following a strong H1, the Group has delivered continued strategic progress during Q3 and financial performance in-line with the updated guidance given alongside H1. The Group continues to expect the proposed acquisition of the Company by Nationwide Building Society (‘Nationwide’) to complete in calendar Q4 2024. Subject to the proposed acquisition completing, the Group will recognise further transaction-related adjustments, but anticipates remaining well-capitalised as part of the larger Nationwide group.

Strategic Update

Financial update to 30 June 2024

Customer lending lower in Q3; continued deposit inflows

Q3 NIM performing in-line with expectations

Adjusted cost:income ratio higher in Q3, as guided at H1

Asset quality remains solid, with stabilising arrears trends

Capital, funding and liquidity remains strong

Outlook

Following VMUK’s Q3 performance, which was in-line with expectations, the Group re-iterates its FY24 guidance, which was last updated at H1 24. The Group also expects to recognise further transaction- related adjustments, subject to the completion of the proposed acquisition of the Company by Nationwide:

Nationwide acquisition

1Adjusted to exclude notable items, including transaction costs and the new Bank of England Levy in FY24

2Competition and Markets Authority

3Virgin Money Investments

4Given fully consolidated accounting following the buy-out in April; there was also £6m of notable income recognised during Q3 relating to VMI income

5Virgin Money licences certain rights to use the “Virgin Money” brand from Virgin Enterprises pursuant to a brand licence agreement between Virgin Money and Virgin Enterprises, to which Virgin Money became a party on 18 June 2018 (the “TMLA”)

The Company further announces that a copy of the Q3 Pillar 3 Disclosures 2024 will shortly be available to view on the Company’s website at: https://www.virginmoneyukplc.com/investor-relations/results-and-reporting/financial-results/. A copy of the document has been submitted to the National Storage Mechanism and will shortly be available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism Link opens in a new window

Announcement authorised for release by Lorna McMillan, Group Company Secretary.

Forward looking statements

The information relates to Virgin Money UK PLC and its subsidiaries, which together comprise the “Group”.

The information in this document may include forward looking statements, which are based on assumptions, expectations, valuations, targets, estimates, forecasts and projections about future events. These can be identified by the use of words such as 'expects', 'aims', 'targets', 'seeks', 'anticipates', 'plans', 'intends', 'prospects' 'outlooks', 'projects', ‘forecasts’, 'believes', 'estimates', 'potential', 'possible', and similar words or phrases. These forward looking statements, as well as those included in any other material discussed at any presentation, are subject to risks, uncertainties and assumptions about the Group and its securities, investments and the environment in which it operates, including, among other things, the development of its business and strategy, any acquisitions, combinations, disposals or other corporate activity undertaken by the Group, trends in its operating industry, changes to customer behaviours and covenant, macroeconomic and/or geopolitical factors, the repercussions of the outbreak of coronaviruses (including but not limited to the COVID-19 pandemic), changes to its board and/ or employee composition, exposures to terrorist activity, IT system failures, cyber-crime, fraud and pension scheme liabilities, risks relating to environmental matters such as climate change including the Group’s ability along with the government and other stakeholders to measure, manage and mitigate the impacts of climate change effectively, changes to law and/or the policies and practices of the Bank of England, the Financial Conduct Authority and/or other regulatory and governmental bodies, inflation, deflation, interest rates, exchange rates, tax and national insurance rates, changes in the liquidity, capital, funding and/ or asset position and/or credit ratings of the Group, future capital expenditures and acquisitions, the repercussions of the UK's exit from the European Union (EU) (including any change to the UK’s currency and the terms of any trade agreements (or lack thereof) between the UK and the EU), Eurozone instability, Russia’s invasion of Ukraine, the conflict in the Middle East, any referendum on Scottish independence, and any UK or global cost of living crisis or recession.

In light of these risks, uncertainties and assumptions, the events in the forward looking statements may not occur. Forward looking statements involve inherent risks and uncertainties. Other events not taken into account may occur and may significantly affect the analysis of the forward looking statements. No member of the Group or their respective directors, officers, employees, agents, advisers or affiliates gives any representation, warranty or assurance that any such projections or estimates will be realised or that actual returns or other results will not be materially lower than those set out in this document and/or discussed at any presentation. All forward looking statements should be viewed as hypothetical. No representation or warranty is made that any forward looking statement will come to pass. Whilst every effort has been made to ensure the accuracy of the information in this document or oral or written material discussed or distributed at any presentation, the Group and their directors, officers, employees, agents, advisers and affiliates do not take any responsibility for such information or to update or revise it. Such information is subject to change. They will not be liable for any loss or damages incurred through the reliance on or use of it. No representation or warranty, express or implied, as to the truth, fullness, fairness, merchantability, accuracy, sufficiency or completeness of the information in this document or the materials used in and/ or discussed at, any presentation is given.

Certain industry, market and competitive position data contained in this document and the materials used in and/ or discussed at, any presentation, comes from official or third party sources. There is no guarantee of the accuracy or completeness of such data. While the Group reasonably believes that each of these publications, studies and surveys has been prepared by a reputable source, no member of the Group or their respective directors, officers, employees, agents, advisers or affiliates have independently verified the data. In addition, certain industry, market and competitive position data contained in this document and the materials used in and/ or discussed at, any presentation, comes from the Group’s own internal research and estimates based on the knowledge and experience of the Group’s management in the markets in which the Group operates. While the Group reasonably believes that such research and estimates are reasonable and reliable, they, and their underlying methodology and assumptions, have not been verified by any independent source for accuracy or completeness, and are subject to change. Accordingly, undue reliance should not be placed on any of the industry, market or competitive position data contained in this document and the materials used in and/ or discussed at, any presentation.

The information, statements and opinions contained in this document do not constitute or form part of, and should not be construed as, any public offer under any applicable legislation or an offer to sell or solicitation of any offer to buy any securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments. The distribution of this document in certain jurisdictions may be restricted by law. Recipients are required by the Group to inform themselves about and to observe any such restrictions. No liability to any person is accepted in relation to the distribution or possession of this document in any jurisdiction. The information, statements and opinions contained in this document and the materials used in and/ or discussed at, any presentation are subject to change.

Certain figures contained in the information, including financial information, may have been subject to rounding adjustments and foreign exchange conversions. Accordingly, in certain instances, the sum or percentage change of the numbers contained in the information may not conform exactly to the total figure given.

No statement in this announcement is intended as a profit forecast, profit estimate or quantified benefit statement for any period and no statement in this announcement should be interpreted to mean that earnings per share for Virgin Money for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Virgin Money or the Group.

Share