Virgin Money's mortgage lending surges in first nine months

(Reuters) - British bank Virgin Money reported a surge in mortgage lending for the first nine months of the year, with its share of gross mortgage lending at 3.5 percent for the first eight months. The challenger bank, which went public last year, said gross mortgage lending rose 38 percent to 5.5 billion pounds ($8.5 billion) for the nine months ended September, while net mortgage lending almost doubled to 2.6 billion pounds from a year earlier. Virgin Money's gross mortgage lending share is based on Bank of England data available until the end of August. Mortgage balances at Sept. 30 were 24.5 billion pounds, up 12 percent from the end of 2014, the Newcastle-based lender said. The bank, backed by founder Richard Branson and U.S. financier Wilbur Ross, said it continued to expect net interest margins slightly ahead of 160 basis points in 2015. Virgin Money, which counts itself among the bigger challenger banks in Britain, said its asset quality remained strong, with a continued low level of impairments in the third quarter. The company is evaluating plans for SME banking and has hired George Ashworth from ABN AMRO Lease NV, where he was managing director of the UK branch, it said. Ashworth is a former head of asset finance at Aldermore Bank Plc . The FTSE-250 company's shares rose 4.3 percent to 419.8 pence in early trading on Thursday on the London Stock Exchange. (Reporting by Noor Zainab Hussain in Bengaluru; Editing by Gopakumar Warrier)