Virgin Money UK has today reported full-year profit below market estimates, pulled down by pressure on lending margins and stubborn inflation that squeezed British banks' returns.
The British banking industry faces a tough economic outlook, higher risks of loan defaults amid a cost-of-living crisis, and margin pressure from fierce competition for savings and mortgage products.
Virgin Money said its underlying profit before tax slumped 24% to £593m for the 12-month period, compared with a forecast of £625m by analysts in a company-compiled consensus.
For the financial year 2024, Virgin Money expects a net interest margin (NIM) - a key measure of a bank's underlying profitability - of 190-195 basis points.
The owner of the former Glasgow-based Clydesdale Bank also announced an additional share buyback plan of £150m. Clydesdale Bank is headed up by former AIB CEO David Duffy.
