- CYBG swung to a profit in the first half of the year even as performance was hindered by intense competition in the mortgage market and a rise in costs following the Independent bank's acquisition of Virgin Money.

For the six months ended 31 March 2019, the bank reported a statutory pre-tax profit of £42m, compared with a loss of £95m a year earlier, as operating income rose 84% to £926m.

But its mortgage business kept a lid on growth as intense competition in the sector continued to weigh on net interest margin.

Net interest income was down 1% for the half from a year earlier, as net interest margin fell 171 basis points due to 'the mortgage pricing pressures seen in 2018, although up 1% on H2 18 after pricing started to stabilise,' the company said.

The company also raised its provision by £33m for mis-selling of payment protection insurance, which it blamed on increased processing costs from speculative PPI claims.'

'As previously announced we have also increased our forecast of the total cost synergies available by £30m to a minimum of £150m by the end of FY 2021. We have already realised £33m of annual run-rate cost synergies in the first six months. As expected, profit before tax has been impacted by the significant Virgin Money acquisition and integration costs,' said David Duffy, Chief Executive Officer of CYBG.

'Despite sustained competition in the mortgage market and a continued uncertain economic backdrop, we have delivered solid growth in our mortgage book and we have seen signs that mortgage pricing has started to stabilise. '

'We remain on track to deliver 2019 performance in line with guidance and look forward to updating the market in June on our refreshed strategy and the significant opportunities for our combined business.'

At 9:17am: [LON:CYBG] CYBG Plc share price was +8.58p at 199.83p

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