Virgin money takes £8m credit card, press on the eve of the absorption CYBG

Virgin money has been forced to cut nearly 8 million pounds previously declared income from his unit with a credit card, but was struck by the fact that the city by reducing costs faster than expected.

The Challenger Bank is taken on the FTSE 250 rival Clydesdale breed of horses-heavy horses and the Yorkshire banking group (CYBG) to £1.7 billion all-share deal is expected to close by the end of the year.

Front tie-up units of credit for virgin money card attracted the attention of the city, including the profits that he ordered earlier in the model is predictive of consumer behavior, using the accounting practice known as the effective interest rate (EPS).

In mixed half-year results today, virgin money admitted that it was more optimistic in its calculations after re-analysis book.

This reduction in profit as previously acknowledged £5.4 m and took £2.4 m click on “current cost income not yet earned” for credit card business.

CYBG has already stated that it will evaluate the use of primary tools on the EMP, while it was reported that regulators from the Bank of England has carefully examined practice across the industry.

Virgin money Executive Jayne-Anne gadhia

Ian Rutherford

Analysts at UBS and Goodbody doubt that the revision will be the last. John Cronin, from Goodbody, said the revaluation showed “our fears begin to materialize,” and suggested that “this is only the beginning in our opinion.”

Ian Gordon at Investec struck a more positive note, calling the results “cheers” with profits and reduce costs both figures came above expectations of the City.

Despite credit card hit, virgin money pre-tax profit up 3pc in the first six months of the year to $ 127.2 M.

The lender received a boost earlier this month when regulators increased the coefficient of capital adequacy is a key indicator of the sustainability of the Bank – more than 250 basis points after re-estimation of cost of mortgage loans. Updated ratio was confirmed today by 16.3 PC.

Jane Anne gadhia, chief Executive of virgin money, said the recommended offer from CYBG “reflects confidence in our strategy,” adding that she was “delighted” the financial success of the company.

The tie-up will create the sixth largest in the UK lender, with 6m customers and £83bn worth of assets.

The combined Bank will be renamed virgin money for three years. In return, he will pay 15 million pounds a year to sir Richard Branson.

Virgin money said it was on course to grow his young business SME Bank to £500 m away from the deposits by year-end.

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