Virgin Money Holdings Share News (VM.)

(ShareCast News) - Virgin Money grew strongly during the first half of the year, beating many analyst's expectations, but with the economic outlook more cautious the company has slightly softened its net interest margin (NIM) guidance.Total income in the half-year to 30 June was up 14% to £290m, with adjusted pre-tax profit increasing 53% to £102m.This was thanks to the underlying return on tangible equity increasing by 2.7 percentage points to 12.2% versus the prior year as the cost-to-income ratio reduced by almost 10 points to 58.8%.The board declared an interim dividend of 1.6p per share.Since the vote to leave the EU Virgin has experienced continued strong customer demand, with no evidence of changes in customer behaviour.However, management changed NIM guidance to "up to 160 basis points for 2016", from the previous low-160's, which it said was dependent on the timing of any Bank of England base rate reduction.Continued progress on return on tangible equity (RoTE) is expected, with "solid double digit RoTE for 2017" ancicipated, compared to the previous "mid-teens".For the half year, mortgage balances increased to £27.7bn, up 9%, with gross mortgage lending of £4.3bn, up 19%.Credit card balances increased to £2.1bn, up 31%, which was a key reason for the improved profits, said chief executive Jayne-Anne Gadhia."Since the vote to leave the EU we have experienced continued strong customer demand and no evidence of changes in customer behaviour. Virgin Money is in a strong position to deal with a period of post-referendum uncertainty as a low risk retail bank with a high-quality asset base and unburdened by legacy conduct issues."She said the challenger bank remained on track to achieve its target of £3bn of high quality credit card balances by the end of 2017 and remained focused on maintaining the high-quality of our mortgage business.