Virgin's profits boosted by 44% rise in mortgage lending

Gross mortgage lending rose to £3.6 billion, with net lending at £1.7 billion in H1 2015.

Mortgage balances increased to £23.6 billion, up 8% from FY 2014. At the end of May 2015, Virgin's mortgage book represented a 20.5% share of the UK's net lending market.

However, similar to Shawbrook's statement this week, Virgin admitted that the "unexpected addition" of the bank surcharge is expected to slow progress to mid-teens returns on tangible equity. The bank also said that competition in the mortgage market remains a headwind in the second half of the year.

Jayne-Anne Gadhia, Chief Executive Officer said:

“I am pleased to report a 37 per cent increase in underlying profit for the first half of 2015. This was driven by balance sheet growth, strong improvement in our net interest margin and effective cost management.

"We continued to increase our share of the mortgage market while protecting the quality of our book. Gross mortgage lending increased by 44 per cent to £3.6 billion in the first half of the year, representing a 3.8 per cent market share of gross lending and a 20.5 per cent share of net lending to the end of May.

"We remain focused not only on delivering growth but also generating sustainable returns to shareholders. As such, we are pleased to announce that, after taking into consideration our strong performance in the first half of the year and the growth prospects of the company, the Board has declared an interim dividend of 1.4 pence per share.”