Newspaper article The Journal (Newcastle, England)

Virgin Money Reports Return to Profit

Newspaper article The Journal (Newcastle, England)

Virgin Money Reports Return to Profit

Article excerpt

Byline: FINANCE Coreena Ford? 0191 201 6331 ? coreena.ford@ncjmedia.co.uk

VIRGIN money announced it returned to profitability in its first set of results posted since its takeover of nationalised lender Northern Rock in January 2012.

The financial group, backed by Richard Branson, said in a trading update that 2012 had been a transformational year for Virgin Money, during which it completed the acquisition of Northern Rock.

The Newcastle-headquartered firm, which now has 2,785 employees, took on the bank in 2012, rebranding all Northern Rock outlets around the UK and instantly giving the online and telephone business a physical, high street presence.

The number of Virgin Money's customer accounts have risen by 1.7 million since the acquisition, while retail deposit balances and mortgage balances grew by 14% and 19%.

In a trading update the company said it saw profit in all four months at the end of 2012 and that it also expects to return profit in 2013.

The firm reduced the loss on the combined business from PS59.1m in 2011 to PS8.4m in 2012, and increased its net income from PS69.2m in 2011 to PS105.3m. The 100-page document also showed that costs of integrating the two businesses amounted to PS10.9m over the two years, costs it said related to rebranding Northern Rock plc to Virgin Money.

It reported an underlying loss of PS8.4m for 2012, compared to PS59.1m pounds a year earlier, but forecast an annual profit on an underlying basis for 2013. The bank also said its core Tier One ratio stood at 18% , compared to the 7% ratio that regulators have demanded British banks achieve by the end of the year.

Jayne-Anne Gadhia, Chief Executive Officer said: "We believe banks should be retail-focused with strong, simple balance sheets; and that they should be well capitalised and capable of building consumer trust by delivering fair, straightforward products with transparent pricing.

"We believe it is this approach that has driven our business forwards, supported the acquisition of new customers and the retention of existing ones, and allowed us to make a strong start on our quest to make banking better. …

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