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Virgin Money notches up 33% surge in mortgage lending

Published 01/11/2016

Virgin Money said the Brexit vote had failed to dent borrower appetite
Virgin Money said the Brexit vote had failed to dent borrower appetite

Virgin Money notched up a 33% surge in mortgage lending as it said the Brexit vote had failed to dent borrower appetite, but added it remained cautious.

The challenger bank said net mortgage lending - overall mortgage lending less borrower redemptions - leapt a third higher to £3.5 billion in the first nine months of the year as it took an 11.5% share of the market.

Net lending to home buyers stood at £1.3 billion in the third quarter, with the group shrugging off the UK's decision to quit the EU.

It took a hit of around £5 million to its net interest income, as it expected, after the Bank of England slashed interest rates to 0.25% in August.

The group, which is backed by Sir Richard Branson, also said it had tightened credit scores for new applications " to protect the credit quality of new credit card lending" in the aftermath of the EU referendum, which led to a slowdown in growth of card lending in the quarter.

Jayne-Anne Gadhia, chief executive of Virgin Money, cheered the lender's third quarter performance and said mortgage lending levels had held up after a record start to the year.

She added the group was "encouraged by the relative strength of the UK economy" after the Brexit vote in June, but said the lender was continuing to look forward "with caution".

It said while it would monitor the impact of the Brexit vote on the group, it did not expect any "material" impact this year.

Virgin Money also announced a deal with 10x Future Technologies, led by former Barclays' boss Antony Jenkins, to build the lender's digital banking platform and provide an insight into customer data.

Ms Gadhia said it will "transform our digital offering over the course of the next few years".

Banking experts at Jefferies said the trading update showed it was "business as usual" for Virgin Money after the Brexit vote.

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