Newspaper article Evening Chronicle (Newcastle, England)

Results Point to Health of the Region

Newspaper article Evening Chronicle (Newcastle, England)

Results Point to Health of the Region

Article excerpt

Byline: Robert Gibson

THE health of the financial sector in the North East has been signalled with announcements of soaring profits at both Virgin Money and Newcastle Building Society.

Virgin Money's results for 2015 - its first full financial year since listing on the Stock Exchange - show the company increased underlying profit before tax by 53% to PS160.3m, up from PS104.8m in 2014.

The rise was driven by market-beating growth across the core mortgages, savings and credit card businesses.

During the period, retail deposit balances increased to PS25.1bn, representing growth of 12%, compared to market growth of 7%. Credit card balances increased 44% to PS1.6bn, while the market overall grew just 4%.

Similarly, mortgage balances grew 16% to, as the market grew 1.8%, and gross mortgage lending amounted to PS7.5bn.

Going forward, the business said, the fundamentals of the UK economy remained stable, helping support consumer confidence and the company's organic plan for growth, albeit in a lower interest rate environment.

In addition to growing its core business, it would continue to explore new opportunity in SME banking.

Virgin Money said its philosophy regarding acquisitions was unchanged and it would consider potential opportunity that were a good fit.

Chief executive Jayne-Anne Gadhia said: "I am delighted to report a 53% increase in underlying profit for 2015 which ended the year at PS160.3m.

"We have performed strongly against our objectives, including delivering market-beating growth in our core mortgages, savings and credit card businesses, maintaining the quality of our balance sheet and delivering a customer satisfaction rating among the highest scoring retail banks in the UK.

"Growth in our mortgage book outpaced the market as we continued to support demand for housing in the UK. …

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