Virgin Money beefs up support for borrowers amid rate hikes and cost crisis
The group said it had boosted customer cost-of-living support, including upping its call centre teams, due to a flood of inquiries after rate rises.
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Your support makes all the difference.High street lender Virgin Money said it has bolstered its call centre teams and temporarily paused some restructuring efforts amid a surge in customer inquiries due to soaring interest rates and cost pressures.
The group said it had boosted customer cost of living support, including upping its call centre teams, due to a flood of inquiries after recent interest rate hikes and following the mini-budget market turmoil last autumn.
But the group expects its restructuring programme to restart in the second half of its financial year.
It set aside a further £66 million for possible bad debts as the economic outlook darkens and it expects borrowers arrears to pick up, but said these were stable so far.
David Duffy, chief executive of Virgin Money, said: “Arrears remain broadly stable but we’veincreased the support available to those who need it and remain prudently provisioned for an uncertaineconomic outlook.”
The group launched a three-year restructuring programme in 2021 to further cut its branch network amid a switch to online banking, but said it has largely paused this since the start of last year in response to the cost-of-living crisis and a post-Covid return to high streets.
It scaled back its branch closure programme in 2022 and put moves on hold to overhaul its call centre operations due to the shift towards online banking.
Virgin Money said it had “strengthened call centre resourcing during a period of elevated customer demand, driven by the multiple base rate changes and further rate volatility post the mini-Budget in September”.
“In order to further underpin service levels, we have also paused some restructuring activity.”
It reported lending growth of 0.7% in its first quarter as it also benefits from higher interest rates, with the Bank of England expected to raise the base rate again from 3.5% to 4% on Thursday.
But this is having an impact on demand for new mortgages, according to Virgin Money, as it slows the housing market and buyers hold fire in anticipation of falling prices.