It showed a 2.2% drop in mortgage lending to £57.1 billion in the three months to December, from £58.4 billion in the same period a year earlier
High street bank Virgin Money UK has revealed a drop in total mortgage lending amid a downturn in the housing market, as it steams ahead with plans to cut its branch network.
The lender said it had been a “positive start to the year” in unveiling Q1 financial results in line with its expectations.
It showed a 2.2% drop in mortgage lending to £57.1 billion in the three months to December, from £58.4 billion in the same period a year earlier.
This drop reflected a disciplined approach to lending in a “subdued” market, the bank added.
But it pointed to early signs that activity in the housing market improved in January, with residential and BTL mortgage applications being more in line with 2019 levels before the pandemic.
Lower mortgage rates are expected to give consumer sentiment a boost, as interest rates have now “peaked”, the bank forecasted.
However, provisions for bad loans grew to nearly £640 million from £617 million in the previous quarter, meaning it set aside more cash for people falling behind on repayments.
The number of customers falling into arrears on credit cards continued to rise while overall arrears remained broadly stable.
The amount of cash deposited with the bank grew by 1.7% to £67.3 billion, from £66.2 billion the previous year, as it added 27,000 net “active” customer accounts during the quarter.
Virgin Money, which had about 6.6 million customers at the end of the 2023 financial year, has been focused on cutting costs and driving a shift towards online and mobile banking.
It said it was on track to meet its target of saving £200 million a year through restructuring, and said it closed 39 branches in the latest three-month period with the loss of nearly 150 full-time jobs.
That means it has shed 30% of its total branch network, leaving it with 91 physical stores, and has also reduced its office space by over a third.
The bank said it is expecting to have spent nearly £275 million on restructuring costs, including improving IT systems, changing property spaces and cutting roles.