# Virgin Money shares leap on higher profit, investor payouts
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-11-21
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Virgin Money shares surge 16% on profit jump and higher
Meta Description: Virgin Money's shares soar 16% as full-year profit jumps 43% to £595 million, with increased dividends and share buybacks despite economic concerns
URL: https://financedigest.com/virgin-money-shares-leap-on-higher-profit-investor-payoutshtml

![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-11-21t072603z1lynxmpeiak05srtroptp4virgin-money-outlook-1736814838663-compressed.jpg)

By Iain Withers

LONDON (Reuters) -Shares in British lender Virgin Money leapt 16% on Monday after it reported a jump in full-year profit and investor payouts, as Bank of England rate rises lifted its finances despite a looming economic downturn.

Virgin Money reported pre-tax profit of 595 million pounds ($703 million) for the year to September, up 43% from 417 million the prior year.

The bank – which resumed investor payouts over the past year – said it would [pay out a final dividend of 7.5 pence per share and buy back an additional 50 million pounds](https://www.financedigest.com/beat-the-exchange-rate-and-buy-that-dream-holiday-home-by-paying-in-pounds.html "Beat the exchange rate and buy that dream holiday home – by paying in pounds! ") worth of shares.

Bank analysts at JPMorgan said the lender’s results were strong, adding shareholder [returns were more generous than expected](https://www.financedigest.com/lufthansa-expects-further-significant-improvement-after-return-to-profit.html "Lufthansa expects further ‘significant improvement’ after return to profit").

Virgin [Money shares](https://www.financedigest.com/how-to-use-algorithms-to-save-time-and-make-money-when-trading-currency-crypto-shares-etc.html "How to use algorithms to save time and make money when trading (currency, crypto, shares etc)") were last up 15% at 0827 GMT.

The country’s sixth-largest lender was created through the merger of Virgin Money and rival CYBG in 2018, in a bid to [challenge the market dominance of banks](https://www.financedigest.com/5-things-to-consider-when-choosing-a-challenger-bank.html "5 Things to Consider When Choosing a Challenger Bank") including Lloyds and Barclays.

Investors are [wary that an economic crunch in Britain could lead to higher](https://www.financedigest.com/asia-shares-creep-higher-wary-on-fed-and-boj-outlooks.html "Asia shares creep higher, wary on Fed and BOJ outlooks") loan defaults and dent bank finances, with official budget forecasters predicting households face a record hit to living standards over the next two years.

However, lenders have also benefitted from [higher rates](https://www.financedigest.com/dollar-jumps-as-powell-flags-higher-terminal-rate.html "Dollar jumps as Powell flags higher terminal rate") designed to curb rampant inflation, as they profit on the gap between what they charge on lending and pay out on deposits.

Virgin Money said it expected its net interest margin – a key measure of [profitability – would increase](https://www.financedigest.com/4-tips-for-landlords-to-increase-rental-property-profits.html "4 Tips for Landlords to Increase Rental Property Profits") from 185 basis points to between 185-190 basis points next year.

The bank set aside 52 million pounds to cover potential bad loans to reflect the deteriorating economic outlook, but said there were [limited signs of credit concerns](https://www.financedigest.com/natwest-limits-customers-crypto-transfers-citing-scam-concerns.html "NatWest limits customers’ crypto transfers, citing scam concerns") so far.

CEO David Duffy told reporters there were, nonetheless, signs [customers were coming](https://www.financedigest.com/doing-nothing-is-not-an-option-when-it-comes-to-the-customer-experience.html "Doing nothing is not an option when it comes to the customer experience") under strain.

Customer spending on energy bills was up 57% and outlay on groceries increased 16%, Duffy said, while the lender had seen a small [increase in credit card spending](https://www.financedigest.com/should-we-be-more-cautious-about-contactless-1-in-4-young-adults-with-contactless-cards-say-theyve-increased-their-spending.html "Should we be more cautious about contactless? 1 in 4 young adults with contactless cards say they’ve increased their spending") on essentials.

We are aware that some [customers will have to make difficult decisions in this environment](https://www.financedigest.com/retaining-insurance-customers-in-a-post-pandemic-environment.html "Retaining insurance customers in a post-pandemic environment"), and we are proactively offering them help and support,” Duffy said.

Virgin Money had raised staff pay to help them cope with [cost of living](https://www.financedigest.com/five-cost-of-living-trends-expected-in-2023.html "Five cost of living trends expected in 2023") pressures, Duffy said.

The [bank has agreed a salary increase](https://www.financedigest.com/banking-and-fintech-convergence-will-increase-reliance-on-it.html "Banking and Fintech Convergence will Increase Reliance on IT") of 9-11% for its staff, split across increases in January and July, a bank spokesperson said.

($1 = 0.8467 pounds)

(Reporting by Iain Withers; editing by Emma-Victoria Farr and Jason Neely)


---
This blog is powered by Superblog. Visit https://superblog.ai to know more.
---