Proactive Investors - Virgin Money UK PLC (LON:VMUK) investors have shrugged off its warning that interest rates will eat away at margins this year, with shares keeping flat on the knowledge the lender will be absorbed by Nationwide.
Net interest margin, a key metric for banks, is predicted to fall in the second half of 2024 as it feels the effect of interest rate cuts and growing competition, the company said in its interim results.
Despite the warning, shares in Virgin Money held flat at 214p, like they have for much of the time since it accepted a takeover offer from Nationwide in March.
The building society offered to buy the FTSE 250 bank for 220p per share or around £2.9 billion, with the deal being approved by shareholders but facing a probe by the Competition and Markets Authority.
In the first six months of Virgin Money's financial year, pre-tax profits rose 18% to £279 million compared to 2023's £236 million, while total customer lending lifted by 0.3% to £72.7 billion.
Chief executive David Duffy said: “While we expect there to be headwinds through the second half of the year, we remain well placed to deliver growth in our target segments.”