Virgin Money UK (ASX:VUK) has posted its interim financial results for the six month period ended 31 March 2022, posting underlying pre-tax profit of $674.5m and a net interest margin of 1.83%.
Despite the strong result during a turbulent period, the charts for VUK may reflect, at first glance, a different story—the stock has been hit with a massive sell-off in the last week, seeing it down 8% heading towards mid-afternoon trade on Friday.
A combination of factors are currently driving uncertainty in world markets—most notably Russia’s ongoing invasion of Ukraine—but this week the US Fed raised interest rates, aggressively, by 0.5%.
And, overnight, the Bank of England has raised interest rates by 0.25% to 1%.
Virgin Money UK’s internal modelling, based on the Oxford Economics Base Case, predicts inflation in 2022 at 6.2% will subdue by 4% into 2023 and then recede to 1.1% in 2024—however, the bank expects inflation to rise to 2% again by 2026.
Included in Virgin Money UK’s interim financial report is its record quarter performance for new credit card accounts with 175,000 products purchased in the three months ending 31 March 2022.
The company claims it now has an 8% share of credit cards in the market.
At the same time, Virgin Money UK has boosted performance on a number of efficiency initiatives in-house, and has also seen an uptick in users of its digital fee-free banking service applications.
The bank is paying an interim dividend of 2.5 pence per share (4.3c Australian).
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