Bad news for small business today with the announcement that Virgin Money has postponed its plans to start lending to small businesses in the UK.
“It’s to do with our view of our economy going forward,” Chief Executive Officer Jayne-Anne Gadhia said. “Is it the right time for us as a management team, as a business, to get into a new asset class with the economy uncertain? We’d always said, depending on the vote of the referendum, we would make the decision.”
The EU referendum vote on June 24 has forced the bank to re-think its plans to broaden out its retail banking offering to business lending.
‘Focusing on building existing business’
“We 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,” Gadhia said.
Rather than follow suit, however, Virgin Money plans to beef up its online banking offering. “From our perspective, although we do not expect gloom and doom, the future is more uncertain for the economy and for businesses in general, so we think the time isn’t particularly right for us to get involved in this new asset class,” Gadhia said.