Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

UK's Virgin Money flags cost pressures in digital push

Stock Markets Nov 04, 2021 06:13AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: People walk past a Virgin Money store in central London, Britain, July 27, 2021. REUTERS/Henry Nicholls

By Muvija M and Iain Withers

(Reuters) -British challenger bank Virgin Money (LON:VM) revised its strategy on Thursday to switch faster to digital banking services, but warned it would have to spend more to get there, sending its shares down as much as 6%.

The lender said it aimed to cut 175 million pounds ($238 million) from its costs over the next three years, but restructuring costs incurred over the period would hit 275 million pounds to achieve this - around double what analysts had expected.

It said the additional cost savings would include cutting branches and offices and embedding remote working over time, but gave no further details.

Virgin Money said in September it planned to close almost one in five of its branches, axing 31 of 162.

The bank also said on Thursday it would return to full-year profit and reinstate a dividend of 1 pence per share, as it benefited from Britain's economic recovery from pandemic lockdowns.

Virgin Money said it expected to report pre-tax profits of 417 million pounds for the year to Sept. 30 in unaudited figures, compared to a 168-million pound loss the previous year.

"We think the market will focus on the significantly higher opex and restructuring costs guidance (in spite of the longer-term cost targets) and that the stock will experience selling pressure this morning," banking analyst John Cronin at Goodbody said in a note.

The shares were last down 4% at 1005 GMT.

Virgin Money said its planned investment in digital services and cost-cutting would help it hit double-digit returns on tangible equity by 2024.

The lender, born out of the merger of CYBG and Virgin Money, said its net interest margin - a key measure of a bank's underlying profitability - improved 6 basis points to 1.62%.

($1 = 0.7337 pounds)

UK's Virgin Money flags cost pressures in digital push

Related Articles

KeyBanc Recommends Owning Apple - Boosts Price Target
KeyBanc Recommends Owning Apple - Boosts Price Target By - Aug 19, 2022

By Sam Boughedda Apple's (NASDAQ:AAPL) price target was raised to $185 from $177 per share by a KeyBanc Capital Markets analyst on Friday. The analyst told investors in a research...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email