Investec's Gordon happy with Virgin Money's stunning performance

Analysts at Investec hailed what they dubbed a "stunning" third quarter performance by Virgin Money, which they believed would lead to consensus marking-up its estimates - again.

In particular, they highlighted a sharp reduction in the lender's capital consumption over the backhalf of 2017, a £1.1bn increase in net mortgage lending quarter-on-quarter and "stable/improving" credit.

The broker credited good retention for the lender's increased net mortgage lending, adding that Virgin Money was awash with surplus liquidity.

Hence the decision to return some of its TFS drawings.

Investec also noted that Virgin's common equity Tier 1 capital ratio was now on track to end the year at 13.5%, well above the lender's target of 12.0%.

Although his earnings per share estimates for the lender for 2%, 9% and 20% ahead of the Bloomberg compiled consensus for second half 2017, 2018 and 2019, analyst Ian Gordon said he was "happy to be there".

Gordon also reiterated Virgin Money as his 'top pick', whilst reiterating a 'buy' recommendation and 395p target price.