A CHALLENGER bank has the armoury to make further gains across an increasingly competitive financial battlefield after recording its “best results”, its boss has told The Northern Echo.

Jayne-Anne Gadhia says Virgin Money’s traditional mortgage, consumer borrowing and savings arsenal will be an anchor for expansion as it ramps up small business lending support (SME), launches a digital bank for customers on-the-move and strengthens its investments and pensions arm.

Ms Gadhia said the Newcastle-based firm had benefited from “market-beating” core product growth, with “high-quality" credit card demand helping the firm meet a long-held £3bn balance target.

And the chief executive also saluted the company’s strength in the mortgage sector, saying changes by the bigger banks over ring-fencing of assets will not derail Virgin’s progress.

Ms Gadhia was speaking after revealing Virgin’s financial results for 2017, which showed underlying pre-tax profit had increased 28 per cent on 12 months earlier to £273.3m.

The figure reflects the business’ growth since it struck a deal for Northern Rock in 2011, with underlying profit before tax coming in then at a £10m loss.

Elsewhere, total income was 13.5 per cent better off at £666m, as customer numbers lifted to 3.34 million, and Ms Gadhia said she was delighted with the upward trajectory.

She told The Northern Echo: “These are the best results that we’ve had.

“Credit cards are up, with really good quality assets.

“People had said we might increase credit cards at the expense of quality but that is absolutely not the case.

“Balances are now up to £3bn and we are really pleased with it.

“We are growing in SME banking, which is going well, and hope to develop the investments and pensions business this year too.

“The digital bank will launch in 2019 and that will be exciting.

“Broadening our appeal through the SME and digital banks will provide access to a wider pool of UK retail banking revenues and further diversify our funding base.”

In the mortgage sector, Virgin, which employs more than 2,000 people in the region, saw its mortgage balance book increase 13 per cent to £33.7bn, giving a gross market share of 3.3 per cent.

Ms Gadhia said the progress was pleasing, adding she expects the former to continue growing at a single digit percentage rate during 2018, despite rivals’ efforts to swell their own share.

She added: “The economy has remained really resilient and housing and mortgages are as well.

“There is more competition in the mortgage market, but we hope that will be better for the sector and lead to more innovation.”

Virgin Money paid the Government £747m for the socalled ‘good bank’ element of Northern Rock back in 2011.

Ms Gadhia added: “Without the people in the North-East and Northern Rock as a foundation, we couldn’t have achieved what we have.”