Virgin Money - formerly known as CYBG - has revealed widened full-year losses after booking an extra £385 million charge for payment protection insurance (PPI) claims.
The Clydesdale and Yorkshire Bank owner, which rebranded after buying Virgin Money in October last year, posted statutory pre-tax losses of £232 million for the year to September 30 against £164 million the previous year.
It was pushed deeper into the red by the fourth-quarter PPI charge following a surge in last-minute claims ahead of the August 31 deadline.
READ MORE: Demise of Clydesdale Bank name confirmed
On an underlying basis and with the PPI bill stripped out, pre-tax profits fell 7% to £539 million from £581 million the previous year.
The group's PPI bill increased to £415 million over the year after the final-quarter claims rush, with total provisions to date £3.01 billion.
It halted the final shareholder dividend payment in light of the PPI hit.
Virgin Money UK chief executive David Duffy insisted the group has a "clear path" to return to statutory profit in 2019-20, with the PPI charges behind it and despite tough retail banking conditions.
READ MORE: Clydesdale value falls by £430m as PPI bites
Virgin Money grew mortgage lending by 1.7% to £60.1 billion, though its net interest margin - a key measure for retail lenders - fell over the year amid intense competition on mortgage market rates.
Customer deposits rose by 4.6% to £63.8 billion.
The group is now focusing away from mortgages towards higher growth areas over the year ahead, such as business and personal lending - which rose 16.1% and 4.5% respectively in 2018-19.
It is also launching a raft of initiatives as it rolls out the Virgin Money rebrand across its Clydesdale and Yorkshire Bank brands, including a digital current account next month, three new concept stores and a loyalty programme offering incentives across the wider Virgin Group.
READ MORE: PPI costs soar for Scottish lenders after last minute surge in claims
Mr Duffy said: "In 2019 we refreshed our strategy, launched our three new divisions and delivered significant integration milestones.
"We are now one bank with the culture and capabilities to deliver on our strategy of disrupting the status quo."
But its overhaul is also seeing it close sites as part of merger cost savings following the £1.7 billion takeover of Virgin Money.
Around 1,500 job losses were announced after the Virgin Money deal, when it warned that around 16% of the combined workforce will go.
Why are you making commenting on HeraldScotland only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereCommments are closed on this article