Virgin Money UK PLC on Monday said trading in the second quarter of 2024 to date has remained broadly in line with expectations.
In March, the Leeds-based lender accepted a takeover approach from Nationwide Building Society, a deal which will create ‘the second largest provider of mortgages and savings in the UK’.
Nationwide will pay 220 pence per share, comprising 218p and a 2p dividend, and equating to a total valuation for Virgin Money of £2.9 billion.
Shares in Virgin Money rose 0.1% to 214.40p each in London on Monday.
Virgin Money and Nationwide said the scheme document, by which the deal will be facilitated, and assorted forms relating to the takeover have been sent to shareholders Monday.
This included the trading update from Virgin Money.
Virgin Money said over the the first half of 2024, it had delivered continued growth in relationship deposits and target lending segments, whilst maintaining a broadly stable margin, with ongoing cost efficiencies mitigating inflation.
Net interest margin continued to be resilient, despite competition and the interest rate backdrop, supported by ongoing effective interest rate outperformance in the credit cards portfolio.
Costs in the second quarter reflected the timing of annual wage rises and the new bank levy in the quarter, it said.
Asset quality trends remain broadly consistent with that seen in the first quarter, Virgin Money noted.
Virgin Money said it had maintained a robust liquidity and funding position, with a strong capital position which, relative to the first quarter, benefited from the cancellation of the share buyback programme.
Lower interest rates and competitive market dynamics are expected to be a headwind to net interest margin for the rest of the year, offset by reinvestment of the structural hedge, growth in target segments and ongoing credit cards effective interest rate outperformance.
The impact of persistent inflation and ongoing investment are expected to be headwinds to cost performance, partially mitigated by Virgin Money’s existing cost saving programme, it commented.
Interim results are expected to be released on June 13 with an unaudited trading update on first half performance on May 14.
A court meeting, and general meeting, of shareholders will be held on May 22 to approve the scheme of arrangement by which takeover by Nationwide will be facilitated, Virgin Money stated.
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