Advertisement

Virgin Money says bad debts are under control

Virgin Money sponsors the marathon: Yui Mok/PA Wire
Virgin Money sponsors the marathon: Yui Mok/PA Wire

Virgin Money boss Jayne-Anne Gadhia on Tuesday said the bank had seen no sign yet of bad debts increasing despite signs customers were beginning to feel the pinch.

Official retail sales figures on Friday showed a shocking decline in High Street spending, triggering some fears that inflation from the weak Brexit pound is beginning to hurt consumers.

But Gadhia said: “Consumer spending continues to be strong and stable. You can see some people are starting to rein in a little bit but low unemployment is the key for us. Employment remains strong and the more we can keep that going well, the better: even if people rein in spending, they’ll still be able to cover their debts.”

Virgin, sponsors of the London Marathon, above, reported strong volumes of lending on mortgages and credit cards — up 3% and 8% in the first three months of the year.

It is still seeing strong mortgage demand in London despite price jitters, with first-time buyers making up 18% of new customers.

Virgin will lend mortgages on central London micro- flats being built by developer Pocket, to get first-time buyers on under £80,000 on the property ladder.

Analysts at Citi toasted Virgin’s higher volumes, lower cost of risk and marginally better net interest margins.