CYBG shares took a hit on Tuesday as it revealed profit margins dipped and mortgage lending was curtailed in the past three months.
The challenger bank, which bought Virgin Money this year for £1.7 billion and will rebrand its operations to that by the year end, says the fall in home loans was more than offset by a rise in its credit cards business.
The City took fright at a slight fall in the net interest margin, the difference between what it pays savers and charges borrowers, to 1.68%.
Analysts noted this was in line with earlier guidance. One said the dive in the shares, 8% to 183p, was “an overreaction”. In the third quarter the mortgage book fell 0.2% to £60.4 billion due to “higher redemptions” and lower lending.
The City is looking for cost savings from the Virgin Money integration.
Chief executive David Duffy said it was a “resilient performance”.
