Brexit vote hits Virgin Money’s SME lending plans

Jayne-Anne Gadhia, Virgin Money chief executive (pictured above), said: “It does not make sense to go into a new asset class at a time when there is uncertainty in the economy.”

The bank had recruited George Ashworth from ABN AMRO Lease UK to develop a strategy for SME lending last October, but he will now be leaving the company.

While announcing strong first-half performance figures for its core consumer products Gadhia stated: “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.”

She said that the bank is well placed “to navigate an uncertain economic outlook and a lower for longer interest rate environment,” which means emphasis on protecting its capital position and ensuring growth is funded in the most cost efficient way.

Ms Gadhia added that Virgin Money “would think much harder about additional recruitment and probably slow down new recruitment because we’re really focused on building the business we’ve got today rather than developing new product lines.”

However, she told the Financial Times that she still expected the bank would get into the SME space “at some point.”