Virgin Money has today reported higher loan book growth in the first quarter, bolstered by strong business lending.

But the British lender said the banking industry still faced uncertainty over how the UK will set terms to trade with the European Union after Brexit. 

Shares of the owner of Clydesdale and Yorkshire banks soared in December after elections gave Prime Minister Boris Johnson a clear majority in the parliament, signalling Brexit-related decisions would be quicker. 

But the company pointed out today that the banking sector still faced competitive pressures and uncertainty over a trade deal that the UK is yet to iron out with the European Union. 

Virgin Money UK, formerly known as CYBG, became Britain's sixth-biggest lender after it bought Virgin Money a couple of years ago. 

The company, which had its market debut in 2016, has gone through a rebranding since the merger, betting on the high profile brand of Richard Branson's Virgin empire to challenge larger and conventional rivals such as Lloyds. 

In the first quarter, business lending rose 2.5%, helping the bank post 1.6% growth in customer deposits to £64.8 billion, as sentiment improved after the election result. 

But the loan book in its mortgage business shrunk by 0.8% to £59.6 billion.

Virgin Money, which assured investors in November that the worst of an industry-wide scandal of mis-selling payment protection insurance was behind it, said costs relating to the mishap were in line with its provisions.