Virgin Money UK PLC (LON:VMUK) reported a rise in full-year income as higher interest rates and credit card expenditure helped offset provisions against bad loans.

Reportedly, statutory profit on ordinary activities before tax increased by 43 per cent in the twelve months to £595 million, which the Newcastle-based bank said was based on the higher rate backdrop. It is to be noted that the Bank of England has raised borrowing costs aggressively to curb surging inflation, including a sharp 75 basis point hike earlier this month.

Unsecured balances increased by 13.8 per cent to £6.2B thanks to robust performance in the lender’s credit cards business, which expanded by more than a fifth annually.

Meanwhile, mortgage lending returned to growth in H2 (second half) of the year despite a drop in demand for new homes in the UK.