Virgin Money keeps “close eye” on consumer credit in latest trading statement

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Virgin money has warned that it is keeping a “close eye” on consumer debt as levels rose by more than eight per cent in the first quarter.

Its January to March report revealed that credit card debt had jumped to £2.65 billion, despite seeing “stable customer behaviour and arrears levels”.

Virgin said it was taking a “cautious approach” to lending.

“We watch the increase in consumer indebtedness closely and continue to lend responsibly to our prime books of mortgage and credit card customers who are showing no signs of strain in the current environment,” it said in its report.

“We prioritise asset quality over balance growth, despite which we remain confident of achieving £3 billion of prime credit card balances by the end of 2017.”

It added that the UK economy has “remained stronger than expected” despite the vote to leave the European Union.

Chief executive Jayne-Anne Gadhia said: “I am delighted with the ongoing momentum and performance of the business so far in 2017.

“Our customer-focused strategy of growth, quality and returns continues to deliver excellent results and demonstrates the benefits of our low-risk business model, strong balance sheet and ongoing focus on operational excellence.”

Earlier this month, the Bank of England’s (BOE) Financial Policy Committee said the recent surge in consumer borrowing could pose a risk to the UK financial system.