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Virgin Money profit plunges 58 per cent on COVID-19 provisions

Virgin Money UK, a former National Australia Bank spin-off, is the latest bank to see profits hit hard by the coronavirus pandemic, with provisions for bad debts slashing returns in the latest half.

The dual-listed bank, which is more than 60 per cent owned by Australian investors and was previously known as Clydesdale Bank, on Wednesday reported a 58 per cent slump in underlying profit, to £120 million ($232 million).

Virgin Money UK chief financial officer Ian Smith.

Virgin Money UK chief financial officer Ian Smith.Credit:Eamon Gallagher

The plunge was driven by a £232 million ($448 million) provision for soured loans, as the lender awaits the full economic impact of the coronavirus lockdown amid unprecedented government support.

The bank, under its own name Clydesdale, was spun off from National Australia Bank in 2016 and remains heavily owned by Australian shareholders, mainly institutional investors.

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