(Reuters) - Virgin Money Holdings (L:VM) has shelved plans to enter the lending market for small and medium-sized businesses due to uncertain face of the UK economy and outlook for firms after Britain voted to leave the EU, the lender's head told Reuters.
Virgin Money, one of the largest and most diversified of the so-called British challenger banks, would instead expand the coverage of its online bank to help it perform better in uncertain conditions following Brexit, Chief Executive Jayne-Anne Gadhia told Reuters.
"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.
The company said it would also pay close attention to cost management as interest rates were expected to stay low for longer after the referendum -- an outcome which could put pressure on banks' financial performance and net interest margins.
"We would think much harder about additional recruitment and probably slow down new recruitment because we're really focussed on building the business we've got today rather than developing new product lines," Gadhia said.