Virgin Money reboots £5bn small business banking plans after UK economy "resilience"

 
Oliver Gill
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Virgin Money was founded by Richard Branson during the 1990s (Source: Getty)

Virgin Money today set out a "refreshed" strategic plan, targetting £5bn in small business banking deposits within the next five years.

Plans to push into the small business banking sector had previously been shelved following Britain's vote to leave the EU.

But boss Jayne-Anne Gadhia today said the "UK economy has remained resilient" and the firm was "delighted to announce the start of our journey into SME banking".

She added:

Looking forward, in order to capture a number of the highly attractive strategic opportunities in front of us, we have refreshed our strategic plan, taking into account expectations for the UK economy, the competitive landscape and exciting market opportunities.

Business banking operations will formally start in January and Gadhia said the potential for development is "attractive" despite the sector being "poorly served".

Read more: Virgin Money close to unveiling all-female leadership team

Virgin Money confirmed it would be applying to the Treasury to benefit from RBS' state aid remedy package. This was agreed by the majority state-owned bank in September, as an alternative to the spin-off of its Williams & Glyn arm.

The firm also took the opportunity to update the market on its outlook and provide guidance for 2018. Virgin Money admitted there was "ongoing competitive pressure in the UK mortgage market", which means gross lending is expected to be towards the lower end of the firm's three to 3.5 per cent range for gross lending.

Shares in the London-listed lender fell as stock markets opened and are currently 4.3 per cent lower than yesterday's closing price.

Read more: Virgin Money share price jumps as it reports increased lending and deposits

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