Virgin Money Holdings (UK) PLC has gained regulatory approval for changes to risk-weightings that will boost its common equity Tier 1 capital ratio by more than 250 basis points.

The company said the Prudential Regulation Authority made a decision on changes Virgin Money had sought to make to its mortgage risk-weight models. All else being equal, the impact, effective June 30, will be an increase in its CET1 ratio to about 16%, while its leverage ratio is expected to be 3.8%. Virgin Money said the improvements will be reflected in its interim financial statements, to be published July 26.

The company said it was also in discussions with the regulator regarding its 2018 supervisory review and evaluation process, and has been notified of the outcome — the revised Pillar 2A capital requirement shall take effect from July 5. Had it been applied at June 30, it would have equated to a Pillar 2A capital add-on of 5.4%, the firm said.