Virgin Money Holdings PLC (LON:VM.) saw its shares gain nearly 5% on Tuesday after the challenger bank reported a 28% jump in 2017 underlying profits.
For the year ended December 31, 2017, the FTSE 250-listed firm's underlying profit before tax increased to £273.3mln, up from £213.3mln the year earlier, as its total income increased by 13.5% to £666mln, up from £586.9mln in 2016.
READ: Virgin Money slumps as it warns on UK mortgage market pressures and shrinking margins
The lender saw its cost-income ratio improve to 52.3%, up from 57.2% in 2016, hitting 49.9% in the fourth quarter, while its Common Equity Tier 1 (CET1) ratio was 13.8%.
Jayne-Anne Gadhia, Virgin Money's chief executive, said: "We generated market-beating growth across our core products as we continued to capture high-quality market share in mortgages and credit cards."
She added: “We continue to experience robust customer demand and stable customer behaviour in a resilient housing market, and we expect to maintain solid double-digit returns in 2018.”
The company reported a total net interest margin (NIM) of 157 basis points for 2017, as guided, with its banking NIM of 172 basis points, also as guided
For 2018, the group anticipates a banking NIM in the range of 165-170 basis points for the current year, although, as a result of lower front book spreads in the mortgage market, it expects it to be at the lower end of that range.
The lender is to pay a final dividend of 4.1p per share, giving a total dividend for the year of 6.0p, an increase of 17.6% compared to 2016
In early morning trading, Virgin Money shares were up 4.8% at 277.3p.