Clydesdale owner and mortgage bad debts

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Virgin Money said it has made cautious assumptions and is preparing to manage higher levels of customers in financial difficulty in coming months.

“The UK economy is emerging from lockdown and we have seen increased consumer spending and economic activity in recent weeks,” said the group in a third quarter trading update.

“The economic outlook remains highly uncertain and it may be some months before the full extent of the impact of the lockdown on the Group’s customers is visible, once Government and other support measures are withdrawn.”

While trading in the year to date has been on line with expectations, the update from Virgin Money underlined the scale of the challenges posed by the fallout from the coronavirus for banks.

These have played a key part in the delivery of the support the Government has provided for businesses and consumers.

Chief executive David Duffy said Virgin Money, which also owns Yorkshire Bank, has granted around 67,000 mortgage and 53,000 personal payment holidays. It has supported around 25,000 business customers with lending arrangements.

The group recently reactivated rationalisation plans which had been put on hold because of the coronavirus. These will result in branch closures in Scotland and in the Clydesdale Bank name disappearing from the high street. All remaining outlets will operate under the Virgin Money brand.

The group said it increased business lending by 5.7% in the third quarter, driven by support for customers through the Government-guaranteed Bounce Back Loan and Coronavirus Business Interruption Loan schemes.

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