Virgin Money has hiked its total dividend for 2017 by 18 per cent to 6p a share after pre-tax profits smashed expectations and hit £273.3million.
The 28 per cent profit boost came after customer banking deposits and mortgage balances increased by 10 per cent and 13 per cent respectively, while the lender’s total income for the year swelled by 14 per cent to £666million.
For its investors, the group recommended a final dividend of 4.1p per share, bringing its total dividend for 2017 to 6p per share. It marks a 17.6 per cent increase on a year earlier.
Boost: Virgin Money’s annual underlying pre-tax profits increased by 28 per cent to £273.3million
Credit card balances increased by 24 per cent to £3billion over the year, with the lion’s share of growth coming from customers who already had deposit accounts.
The bank’s share price is up 5.95 per cent or 15.75p to 280.25p.
As Virgin Money continues its quest to prize customers away from the country’s bigger banks, like HSBC and Barclays, its annual statutory profits rose by 35 per cent to £262.6million.
With the sum on its mortgage books rising to £8.4billion in the last year, the lender now has a 3.3 per cent slice of the mortgage market.
In charge: Virgin Money’s chief executive Jayne-Anne Gadhia
While the bank reported strong results for the year, it’s outlook for the year ahead remained cautious.
‘Our central planning scenario for the year assumes a continuation of resilient economic conditions and modest economic growth’, the bank said.
The bank warned that returns this year would be at the lower end of guidance as competition in the lending market grows.
Virgin Money, which has 3.34 million customers, pushed into small business banking in January in an attempt to narrow the gap on Britain’s biggest lenders.
It launched an SME savings account and set its sights on securing £5billion of SME deposits within five years.
Commenting on the group’s performance, Jayne-Anne Gadhia, Virgin Money’s chief executive, said: ‘We generated market-beating growth across our core products as we continued to capture high-quality market share in mortgages and credit cards.
‘We maintained our uncompromising focus on asset quality and we continued to improve our operating leverage. In doing so, we met or exceeded all of our financial targets for the year.
‘We continue to experience robust customer demand and stable customer behaviour in a resilient housing market, and we expect to maintain solid double-digit returns in 2018.’