UK’s Virgin Money recovers surplus, aims cost savings

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Virgin Money UK restored its dividend on Thursday, with the bank announcing new medium-term growth targets for margins and cost cuts as revenues recovered from the COVID-19 epidemic.

“We performed very strongly in FY21, with an expected return to statutory profit before tax underpinned by significant underlying profit growth,” Chief Executive David Duffy said in a statement.

The health crisis has helped challenger banks in the United Kingdom, a relatively young breed of lenders that regulators hope will challenge the dominance of century-old mainstream banks.

Virgin Money (LON:VM) UK said its underlying earnings for the fiscal year ending in September is likely to increase to 801 million pounds ($1.09 billion), up from 124 million pounds in the year before the epidemic.

The lender, which was formed by the merging of CYBG and Virgin Money, has set a gross cost-cutting target of 175 million pounds over the next three years, with half of that scheduled to be reinvested in the firm.

The company, which announced a new digital development plan in September, has set a dividend of 1 penny per share for the coming year.

Virgin Money UK’s net interest margin rose 6 basis points to 162 basis points in fiscal 2021, prompting the bank to forecast a NIM of 170 basis points for the current year.

Story by : Norvisi Mawunyegah