Challenger bank Virgin Money saw a near six per cent rise in business lending during their third quarter as companies looked to survive during the COVID-19 enforced UK lockdown.
In their latest trading update, the Glasgow-based firm revealed it had offered payment holidays and overdraft extensions to almost 150,000 people and businesses, while it granted £867m in Government-backed loans to companies in difficulties.
Mortgage portfolio also fell by 1% due to a lack of market activity whilst personal lending declined to £5.2bn.
Customer balances did increase to £67.7bn, with many consumers spending less over the course of the lockdown period.
Despite the economic uncertainty the UK is facing off the back of the pandemic, Virgin Money confirmed that trading numbers for the nine months to June 2020 were in line with the Board’s expectations.
Chief executive officer David Duffy said: “I am pleased with the way the Group has performed during the pandemic. In a severely disrupted environment we are delivering on what we set out in May; to safeguard the health and wellbeing of our colleagues, customers and communities while protecting the bank. Our Q3 financial results reflect lower demand from consumers due to the pandemic, but strong demand from businesses for Government-supported schemes, with the Group further increasing its provisions to reflect the uncertain economic outlook while maintaining a focus on margin, cost and capital management.
“Our priority remains on offering the right support for our customers in need. We have now granted c.67k mortgage and c.53k personal payment holidays, and we’ve supported c.25k business customers with lending arrangements. We know that things may yet get more difficult for many of our customers, but we are determined to continue to support their needs where we can and to fulfil our role in the economic recovery. I’m proud of the way our colleagues have responded to the significant challenges of recent months, and encouraged by the agility with which we have adapted our operations.
“We have now recommenced our transformation and rebrand activity, taking what we have learned through the pandemic to deliver on our mission to disrupt the status quo as a full-service digital bank.”
Virgin Money halted a plan for branch closures and head office job losses at the start of the pandemic, but announced at the start of July that the programme would be re-started.
It had initially planned to cut 500 jobs and close or merge 52 branches across the country, although this figure has been reduced by 200 due to changes made in response to the panedemic.