LONDON, Nov 21 Reuters Shares in British lender Virgin Money leapt 16 on Monday after it reported a jump in fullyear profit and investor payouts, as Bank of England rate rises lifted its finances despite a looming economic downturn.

Virgin Money reported pretax profit of 595 million pounds 703 million for the year to September, up 43 from 417 million the prior year.

The bank which resumed investor payouts over the past year said it would pay out a final dividend of 7.5 pence per share and buy back an additional 50 million pounds worth of shares.

Bank analysts at JPMorgan said the lender39;s results were strong, adding shareholder returns were more generous than expected.

Virgin Money shares were last up 15 at 0827 GMT.

The country39;s sixthlargest lender was created through the merger of Virgin Money and rival CYBG in 2018, in a bid to challenge the market dominance of banks including Lloyds and Barclays.

Investors are wary that an economic crunch in Britain could lead to higher loan defaults and dent bank finances, with official budget forecasters predicting households face a record hit to living standards over the next two years.

However, lenders have also benefitted from higher rates designed to curb rampant inflation, as they profit on the gap between what they charge on lending and pay out on deposits.

Virgin Money said it expected its net interest margin a key measure of profitability would increase from 185 basis points to between 185190 basis points…