Finance Hunter Ruthven · 27 July 2016
Virgin Money slams brakes on small business lending plans
Contained within Virgin Money’s half-year results was as revelation that the financial institution was taking a prudent? decision to defer its SME and unsecured lending plans. Back in 2015, Virgin Money declaredthat developing an SME business was seen as one of its ‘strategic opportunities? alongside growing current accounts and launching a new digital product. However, in light of the recent Brexit vote, Virgin Money has said: Our strategy is focused on creating a business that can continue to grow, maintaining our excellent asset quality and successfully delivering sustainable shareholder returns through the economic cycle. as part of this, we have decided that it is prudent to defer our SME and unsecured lending plans and focus investment on enhancing our digital capability. Its full financial release also included news that underlying profit before tax increased by 53 per cent to 101.8m in the first half of the year when compared with the same period in 2015. The lender revealed it is in a ‘strong position? to deal with a period of post-referendum uncertainty, and that since the Brexit vote has continued to experience continued sturgeon customer demand. However, speaking to the Financial Times, Virgin Money chief executive Jayne-Anne Gadhia said: it’s a timing point rather than anything else, so we still expect Virgin Money to get into SME space at some point. For now, it allows us to focus on digital development. Commenting on Virgin Money’s decision to postpone its SME lending offering, Craig Iley, managing director of challenger bank Atom’s business banking operations, said: Now is the time for the banking industry to support these companies and individuals who are key to the future of our economy and the global economy. atom is committed to supporting other small businesses to grow, and to continuing to grow our SME lending offering via our panel of hand-picked intermediaries. Now is the time to prioritise investment in the businesses that will be driving the success of the UK for next decade and beyond; we are not going to take that away.
ABOUT THE EXPERTHunter Ruthven
Hunter Ruthven was previously editor of Business Advice. He was also the editor of Real Business, the UK's most-read website for entrepreneurs and business leaders at the helm of growing SMEs.