UK financial services provider Virgin Money increases net annual interest over inflation

UK financial services provider Virgin Money increases net annual interest over inflation

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Virgin Money (VM) UK, a British challenger bank, raised its yearly net interest margin outlook on Tuesday, citing higher interest rates and a return to pre-pandemic credit card consumption as reasons.

The Bank of England raised interest rates for the first time since the coronavirus outbreak began in December, and the market expects further hikes this year as inflation rises.

In the year to September 2022, the London-listed company expects its net interest margin (NIM) – a fundamental measure of a bank’s underlying profitability – to be about 175 basis points.

Lower-cost funds, more enormous hedge contributions, and a higher-yielding lending mix helped raise its NIM to 177 basis points in the first quarter. In a time when banks are under pressure from ultra-low interest rates, Ibercaja wants to improve its return on tangible equity ratio.

In November, the lender announced that it wanted to digitise its services more quickly observed a surge in total credit card expenditure in the third quarter, with new accounts opening at a record high of 132,000, the most since the epidemic began.

However, due to a drop in government-backed lending and decreased market demand, Virgin Money, formerly known as CYBG, suffered a decline in mortgage and business lending.

On Tuesday, world stocks appeared to be leaving a tumultuous January behind them, with a spate of soothing statements from Federal Reserve officials helping to alleviate rate-hike fears.

The Australian dollar was one of the most active currencies on the currency markets, regaining 0.3 percent after taking a hit from the Reserve Bank of Australia’s dovish message. At the time of writing, it was trading at $0.7083.

The dollar was typically weaker against other major currencies, as aggressive Fed rate hike wagers gave it the upper hand. The euro was up 0.2 percent at $1.1258, sterling was up 0.25 percent, and the dollar was down 0.13 percent at 115 yen.

Because of the volatility in international markets, Spanish bank Ibercaja has postponed its initial public offering (IPO), the firm said in a filing to the Madrid market regulator on Tuesday.

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