Virgin Money boosts mortgage lending to £1.6bn

Virgin Money increased its gross mortgage lending by a third to £1.6bn in the first quarter of 2015 year on year with the challenger bank estimating that it provided 3.6 per cent of gross lending during the first three months of the year.

The lender reported a 127 per cent increase in underlying profit before tax for 2014 and said on Friday that it was entering the second quarter "with a strong mortgage pipeline".

Net mortgage lending in the first quarter of 2015 grew 82 per cent to £664m while mortgage balances on March 31 were £22.6bn, up 3 per cent from the end of 2014. The challenger group said that its estimate for its first quarter market share was based on Bank of England data for January and February and Council of Mortgage Lenders data for March.

Virgin Money also reported that its credit card balances stood at more than £1bn at the end of March. This comes after the migration of about 675,000 credit card accounts following the purchase of credit card business MBNA. The bank's target is to have £3bn of credit card outstanding balances by the end of 2018.

Jayne-Anne Gadhia, chief executive, said the bank was continuing its "trajectory of growth while retaining a high-quality balance sheet".

"We have also maintained strong momentum in the development of the business across multiple business lines, marking significant progress towards our long-term strategic objectives," she said.

The bank, which is backed by Sir Richard Branson, floated last November and entered the FTSE 250 at the end of March. Other business areas included in its portfolio are its Essential current account, the full rollout of which was completed in March, and the launch of a life insurance product in agreement with Friends Life during the same month.

Last month Virgin Money issued medium-term notes with a coupon of 2.25 per cent. The offering was so oversubscribed that it was increased from £250m to £300m.

Virgin Money floated its shares at 283p. They rose to a high of 432p early last month; on Thursday they closed at 396p.

In early trading on Friday they were up 2 per cent at 402p.

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