May 14 Reuters British bank Virgin Money UK warned of a tepid secondhalf of the year on Tuesday, citing higher costs and lower profit margins due to growing investments, inflationary pressures and stiff competition for deposits.

The lender, which agreed to a 2.9 billion pound 3.64 billion allcash takeover deal from 140yearold mutuallyowned building society Nationwide in March, said it expected net interest margin NIM a key indicator of a bank39;s underlying profitability to be lower in the second half of the year.

Expect NIM in H2 to be impacted by lower contribution from cards effective interest rate adjustments, ongoing competition and lower interest rates, the lender said in a statement.

However, it stuck by its fullyear NIM forecast to be in the range of 190195 basis points.

Virgin Money said the first half of its financial year was inline with expectations, at a time when competition among banks for mortgage business and deposits has ramped up.

The company said mortgages were 2 lower at 56.6 billion pounds in the first half ended March 31, reflecting the subdued market, while overall customer deposits climbed 2 to 68.2 billion pounds.

1 0.7963 pounds

Reporting by Eva Mathews in Bengaluru; Editing by Nivedita Bhattacharjee and Rashmi Aich

Source Reuters