Virgin Money has reported a boost to profits with significant growth of its mortgage lending.
The Edinburgh-based bank issued half-year figures showing underlying pre-tax profits up 37% to £82m.
Gross mortgage lending was up 44% to £23.6bn. Virgin Money had 3.8% market share of the lending market at the end of May.
Retail deposits were up 3% to £22.8bn, meaning 88% of lending is funded by depositors.
Virgin Money is building its credit card business rapidly, following the transition of 675,000 accounts from card specialist MBNA earlier this year.
Virgin now has £1.1bn loaned through credit cards, and plans to build that to £3bn by the end of 2017.
However, reaching its target for earnings has been postponed as a result of the bank surcharge introduced in the most recent UK Budget.
While underlying profits were up strongly, the statutory profits were up much more sharply, from £6m to £55m.
That is because they compare with the first half of 2014, when a large payment was made to the Government as part of Virgin’s agreement to take over part of Northern Rock.
Jayne-Anne Gadhia, Chief Executive Officer said: “Gross mortgage lending increased by 44% to £3.6 billion in the first half of the year, representing a 3.8% market share of gross lending and a 20.5% share of net lending to the end of May.
“We remain focused not only on delivering growth but also generating sustainable returns to shareholders.”
Virgin Group continues to hold a 35% stake in Virgin Money.
Another Edinburgh-based bank, Royal Bank of Scotland, announced it is to continue its retreat from foreign markets, by selling 14% of Citizens Bank, its former US retail subsidiary. It is expected to raise more than £1.3bn.
Having floated the company on the New York Stock Exchange in September, a sale of the full stake being put on the market will take the RBS holding to below 27%.
RBS retains a veto on some decisions. And while the liabilities of Citizens Bank remain on RBS’s books for now, the Royal Bank wants to remove them to improve its capital ratios.
Owning less than half the company, It is to remove Citizens Financial Group results from its financial reporting.
Citizens has gained 21% in valuation since the float in September.
RBS bought it in 1988 in the early stages of its global expansion. It is to issue its half-year results on Thursday.