Virgin Money expects ‘headwinds’ in second half of year as firm prepares for Nationwide takeover

Virgin Money also said that it anticipates cost pressures from inflation and investment in the second half of the year, which will only be “partially mitigated” by the group’s ongoing cost savings programme.

David Duffy, CEO, said: “Over the first six months, we have continued to deliver on our strategic ambitions in line with expectations.

“While we expect there to be headwinds through the second half of the year, we remain well placed to deliver growth in our target segments.”

Virgin Money said that its customer loans had been stable in the first half of the year at £72.2bn, as five per cent growth across target lending segments of business and unsecured lending was offset by lower mortgage balances.

Mortgages for the bank were two per cent lower in the first half at £56.6bn. The firm said this reflected a subdued market, but that customer demand had improved since the start of the calendar year, with application volumes higher in the second quarter.

In March of this year, Nationwide announced that it had agreed terms with Virgin Money to buy the business for £2.9bn.

If the move goes ahead, it is expected to create one of Britain’s biggest banks, with the combined group responsible for almost £366bn of assets.

In its latest announcement, Virgin Money said that the acquisition presents an “exciting opportunity to build on our significant strategic progress by combining two complementary businesses”.

The group added that it had deferred certain restructuring activity in light of the proposed acquisition by Nationwide.