Virgin Money's underlying pretax profit jumps 53 percent
By Noor Zainab Hussain
(Reuters) - British lender Virgin Money Holdings Plc said its full-year underlying pretax profit rose 53 percent, helped by growth in its core mortgages, savings and credit card businesses which outpaced the market.
Shares in the FTSE 250 Midcap <.FTMC> company, which rose as much as 10.51 percent on Wednesday, were up 7.23 percent at 364.5 pence at 1013 GMT.
The bank, which listed on London's main market in 2014, said it would increase credit card balances to at least 3 billion pounds ($4 billion) by the end of 2017, a year earlier than it anticipated. Credit card balances rose 44 percent to 1.6 billion pounds during 2015.
Underlying pretax profit rose to 160.3 million pounds for the year ended Dec. 31 from 104.8 million pounds a year earlier.
"After a miserable FTSE100 bank results season in which every large bank missed market expectations, here come the UK "challenger banks"! Today's Virgin Money results (once again) represent material outperformance vs consensus expectations," Investec analyst Ian Gordon wrote in a note.
Virgin Money, which is one of the bigger "challenger" banks in Britain, said gross mortgage lending rose 29 percent to 7.5 billion pounds in the year. The British housing market had been buoyant in 2015.
The bank recommended a final dividend of 3.1 pence per share, taking the total for the year to 4.5 pence per share.
Virgin Money said it was aware of the risks related to the impending UK referendum on EU membership, the uncertain outlook on interest rates, and the recent market turbulence caused by the slowdown in emerging markets and falling commodity prices.
Britain will hold a referendum on its EU membership on June 23 and the possibility of "Brexit" has kept the sterling near a seven-year low against the dollar.
PRICE OF BREXIT
Chief Executive Jayne-Anne Gadhia said the bank was aligned with UK economy and if Britain was to stay in or exit the EU, Virgin Money would perform based on the impact a potential Brexit would have on the UK economy as a whole.
Gadhia, the first female CEO of a listed British bank, added that if there was to be a "Brexit", the issue would be the likelihood of increased prices in consumer finance, mortgages and credit, and therefore financial products because of the uncertainty in the market and the potential impact on sterling.
"I would see that prices would probably increase and we would follow the market in pricing accordingly." Gadhia said.
($1 = 0.7161 pounds)
(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Anupama Dwivedi)
