Virgin Money UK flags higher cost-to-income ratio in second half (updated)

Virgin Money UK

13/06/2024 07:53

(Adds details and background from paragraph 2 onwards)
       June 13 (Reuters) - Virgin Money UK  VMUK.L  on Thursday
warned of a higher cost-to-income ratio in the second half of
the year, as the British lender delayed certain restructuring
plans due to an all-cash takeover proposal from building society
Nationwide.
    The cost-to-income ratio is a key measure of efficiency
where lower is better.
    The impact of inflation and investments will only be
partially offset by the company's cost-savings programme, as
some restructuring has been deferred due to the proposed
acquisition by Nationwide, representing further headwinds
relative to the first half, CEO David Duffy said.  
    The lender, which earlier this year agreed to a
2.9-billion-pound ($3.71 billion) all-cash takeover by
Nationwide, reported an 18% rise in statutory pre-tax profit on
ordinary activities to 279 million pounds for the six months
ended March 31.
    Last month, London-listed Virgin Money warned of a lower net
interest margin (NIM) - a key indicator of a bank's underlying
profitability - in the second half of the year. 
    The company, however, retained its full-year NIM forecast to
be in the range of 190 to 195 basis points.
    "While we expect there to be headwinds through the second
half of the year, we remain well-placed to deliver growth in our
target segments," Duffy said. 
        
    ($1 = 0.7826 pounds)
    
    

 (Reporting by Echha Jain in Bengaluru; Editing by Subhranshu
Sahu and Sherry Jacob-Phillips)
 ((Echha.Jain@thomsonreuters.com;))