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Nov. 25, 2020, 2:38 a.m. EST

Virgin Money pretax loss narrows despite charge

By Sabela Ojea

Virgin Money UK PLC reported Wednesday a narrowed pretax loss for fiscal 2021 despite booking a significant impairment charge and said it is well positioned for an uncertain outlook.

The financial services company posted a pretax loss of 168 million pounds ($224.5 million) for the year ended Sept. 30 compared with a loss of GBP232 million for the same period a year earlier. Underlying pretax profit declined to GBP124 million from GBP539 million.

Virgin Money booked a credit impairment charge of GBP501 million, up from GBP153 million in fiscal 2020.

Underlying net-interest income--one of the company's preferred metrics--decreased to GBP1.35 billion from GBP1.43 billion in fiscal 2020.

Statutory return on tangible equity stood at a negative 6.2%, up from a negative 6.8% ROTE for fiscal 2019. The company expects to deliver a double digit statutory RoTE over time, which it noted will support future capital return to shareholders.

Regarding its costs, Virgin Money added it expects to book between GBP10 million and GBP15 million of Covid-related costs in fiscal 2021. The group is targeting an underlying operating cost base of less than GBP875 million, down from GBP917 million in fiscal 2020.

Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix

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