Virgin Money UK on target to launch current account offering

Virgin Money UK has said it is on target to launch its current account during 2014, after publishing its full year fiscal 2013 results.

Virgin Money UK has said it is on target to launch its current account during 2014, after publishing its full year fiscal 2013 results.

The bank said that good progress had been made during 2013 towards the current account launch and that initial testing had begun around the end of the year.

CEO Jayne-Anne Gadhia commented that the current regulatory environment provides favourable conditions for the lender as it prepares to offer full retail services.

She said: "We do not believe that regulatory changes will distract us from our priorities, nor constrain our ability to continue to grow.

"Any move to increase competition in retail banking, either by requiring further divestments or through a full review by the Competition and Markets Authority, would help to create a more level playing field between the large incumbent banks and strong new entrant banks such as ourselves.

"The introduction of full current account portability would enable us to accelerate our plans to enter the current account market."

Among the other highlights of the annual report was Virgin Money’s return to profit.

Pre-tax underlying profit for the fiscal year 2013 was £53.4m ($89m), compared to a loss of £2.5m for fiscal year 2012.

Other highlights included:

  • Total income increased by 42% from £269m in 2012 to £384.5m in 2013
  • Total assets increased by 12.8% from £21.8bn in 2012 to £24.6bn in 2013
  • The net interest margin rose by 72 basis points from 0.54% to 1.26%

Less positive metrics included:

  • The cost-to-income ratio remained high at 76.5%, although this represented a fall of 20.9 percentage points on last years 97.4%
  • The Financial Services Compensation Scheme charge for 2013 rose from £5.9m in 2012 to £19.4m, a cost Gadhia described as "a material figure for a bank of our scale"

In her review of the results, Gadhia emphasised Virgin’s cautious approach, describing the mortgage portfolio as "low risk".

The lender also showed a degree of caution in maintaining a conservative loans-to-deposit ratio at 96.4%, up 3.3 percentage points on 2012.

 

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