People walk past a Virgin Money store in central London, Britain, July 27, 2021. REUTERS/Henry Nicholls/File Photo Acquire Licensing Rights
Nov 23 (Reuters) – Virgin Money UK (VMUK.L) on Thursday reported full-year profit below market estimates, pulled down by pressure on lending margins and stubborn inflation that squeezed British banks’ returns.
The British banking industry faces a tough economic outlook, higher risks of loan defaults amid a cost-of-living crisis, and margin pressure from fierce competition for savings and mortgage products.
Virgin Money said its underlying profit before tax slumped 24% to 593 million pounds ($738.94 million) for the 12-month period, compared with a forecast of 625 million pounds by analysts in a company-compiled consensus.
For the financial year 2024, Virgin Money expects a net interest margin (NIM) — a key measure of a bank’s underlying profitability — of 190-195 basis points.
The owner of the former Glasgow-based Clydesdale Bank also announced an additional share buyback plan of 150 million pounds.
($1 = 0.8025 pounds)
Reporting by Eva Mathews in Bengaluru and Iain Withers in London; Editing by Sherry Jacob-Phillips
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