Nationwide’s recently acquired lender Virgin Money UK PLC (LSE:VMUK) reported a reduction in its Common Equity Tier 1 (CET1) ratio to 13.6% in the six months ending September 30, marking a 1.1 percentage point decline compared to the same period in 2023.
CET1 is a key regulatory metric that measures a bank’s core equity capital relative to its total risk-weighted assets.
It was implemented as implemented in response to the 2008 global financial crisis to ensure that financial institutions can absorb financial shocks.
Though reduced, Virgin Money’s CET1 ratio remains substantially above the 4.5% regulatory absolute minimum.
The decrease reflects various financial adjustments, including the impact of a £250 million fee related to a trademark license agreement and £63 million in shareholder returns through a share buyback program.
The bank also absorbed costs linked to the acquisition by Nationwide, completed earlier in October 2024.
Virgin Money reported a year-on-year increase in net interest income (NII), rising by 4.12% to £1.78 billion from £1.72 billion in the previous year, driven by higher yields on mortgages and unsecured lending.