FTSE 250: 19,437.78 , up 0.80% at 1530 GMT.
Virgin Money shares surged as the bank reported a 43% rise in full-year profits driven by higher interest rates and said it would extend its share buyback by £50m.
The bank said pre-tax profit surged 43% to £595m, beating analysts forecasts of £578m. It also posted impairment losses of £52m, compared with a £131m credit a year ago.
Shareholders were rewarded with a 7.5p-a-share dividend and an additional stock buyback on top of £75mn announced in June.
Net interest margin, the difference between loan and savings rates, increased to 1.85% from 1.65% as the Bank of England increased its base rates to combat spiralling inflation, currently at 11%. Virgin said it expected NIM to be 1.85-1.90% in the current fiscal year.
“While not directly exposed to Ukraine, we have seen second-order impacts on the broader UK economy from higher costs, higher interest rates and potential pressure on our customers and asset quality,” the bank said.
“At present, credit quality indicators remain benign but we remain cautious on the outlook, and stand ready to support customers further if needed. Against this backdrop, impairment charges were muted as provisions taken for Covid-19 impacts were unwound.”
“Despite a modest reduction, we have retained above pre-Covid levels of coverage with a potentially challenging economic outlook in mind, and to reflect worsening macroeconomic forecasts.”
Credit card lending was up 13.8% year-on-year to £6.2bn while mortgage lending returned to growth in the second half, despite the mini-budget turmoil when the bank temporarily pulled its entire mortgage product range after rates soared in the wake of sacked finance minister Kwasi Kwarteng’s mini-budget fiasco in September.
RHI Magnesita shares fell after the company said it had bought the Indian refractory business of Dalmia Bharat Refractories in a share swap agreement.
The deal will see RHI take on the business in exchange for 27 million shares in its 70%-owned India-listed subsidiary of the group valued at around €212m.
Following completion, the group’s shareholding in RHI Magnesita India will fall to 60.1% and the Dalmia Bharat Group and minority shareholders in DBRL will hold a combined 14.4% stake.
FTSE 250 – Risers
Virgin Money UK (VMUK) 167.55p 15.08%
PureTech Health (PRTC) 262.00p 9.17%
Balanced Commercial Property Trust Limited (BCPT) 91.30p 7.54%
Kainos Group (KNOS) 1,697.00p 6.93%
Urban Logistics Reit (SHED) 153.00p 6.25%
Darktrace (DARK) 386.70p 5.40%
Syncona Limited NPV (SYNC) 185.00p 4.64%
Chemring Group (CHG) 307.50p 4.24%
NextEnergy Solar Fund Limited Red (NESF) 115.70p 4.23%
HarbourVest Global Private Equity Limited A Shs (HVPE) 2,435.00p 3.84%
FTSE 250 – Fallers
ASOS (ASC) 657.00p -6.61%
RHI Magnesita N.V. (DI) (RHIM) 2,138.00p -4.81%
Shaftesbury (SHB) 373.60p -4.65%
Tullow Oil (TLW) 44.10p -4.55%
Capital & Counties Properties (CAPC) 107.60p -3.41%
Aston Martin Lagonda Global Holdings (AML) 127.25p -3.38%
International Distributions Services (IDS) 244.10p -3.25%
Bodycote (BOY) 580.00p -2.93%
Premier Foods (PFD) 106.60p -2.56%
Ferrexpo (FXPO) 139.40p -2.45%
