Virgin looks to UK SME market
(2 March 2017 – United Kingdom) Virgin Money is considering entering the small business banking market with aid from the Royal Bank of Scotland under new Treasury plans to boost competition in the sector.
Speaking to the Financial Time (FT), Virgin Money’s chief executive, Jayne-Anne Gadhia, said that the “new-look Williams & Glyn might help us to get there” should the lender choose to enter the business banking market.
In February, the Treasury announced that it had proposed to Brussels an alternative to RBS carving out 300 branches under its Williams & Glyn brand, to satisfy the European Commission’s conditions of receiving a £45.5 billion (A$73.8 billion) bailout during the financial crisis.
The alternative plan, which is set to cost RBS at least £750 million, involves funding for challenger banks, “dowries” to encourage small business customers to switch, and access to RBS’s branch network.
She added that the lender may also look at buying assets from the Co-Operative Bank after it put itself up for sale last month.
“We’ve always said we’ll look at all opportunities. We don’t need to do an acquisition for this business to grow and thrive. That means we can always look at acquisition opportunities sensibly,” she said.
Although Virgin Money does not currently have a presence in the small business market, it has flagged interest in the past, however those plans were shelved following the EU referendum.
On Tuesday, the bank reported a statutory pre-tax profit of £194 million last year, up from £138m a year earlier. Its credit-card balances increased 55 percent to £2.4 billion, and ensuring the lender will reach its £3 billion goal by the years’ end. According to the bank, net mortgage lending increased by a fifth to £4.3 billion, awarding it an 11 percent market share.
Gadhia added that the focus was on building Virgin Money’s digital services, after it entered into partnership with 10x Future Technologies founded by Antony Jenkins, former Barclays chief executive, last year.
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