UPDATE 1-Virgin Money profits erased by coronavirus provision

LONDON, May 6 (Reuters) - Virgin Money swung to a
first-half loss after setting aside 237 million pounds ($294.7
million) to handle loans likely to turn sour as a result of the
coronavirus crisis.

The bank, which became the UK's sixth-largest lender
following a merger with CYBG, reported a pre-tax loss of 4
million pounds for the six months ended March 31, compared to a
50 million pounds profit a year earlier.

The pre-tax loss was in line with expectations, according to
an average of analyst forecasts compiled by the company.

The provisions echo similar moves by Britain's biggest banks
RBS, Lloyds, HSBC and Barclays
, who set aside 6.7 billion pounds in provisions for
likely loan losses last week.

The government imposed a lockdown in late March to contain
the spread of the new coronavirus, bringing the economy to a
near halt and making it tougher for some businesses and
consumers to pay back loans on time.

Virgin Money, which is in the midst of rebranding, said it
had entered the crisis from a position of strength, but warned
it anticipated "limited customer demand for lending and an
increase in the number of customers suffering challenges" over
the next six months.

The bank - which has lost more than 60% of its market value
this year amid a heavy sell-off of lender stocks - reported a
core capital buffer of 13.4%, above expectations of 12.8%.
($1 = 0.8042 pounds)
(Reporting by Iain Withers, Additional reporting by Muvija M;
Editing by Sinead Cruise)