You are here: Home - News -

Virgin Money warns of lending dip but targets £5bn growth through Open Banking platform

by:
  • 16/11/2017
  • 0
Virgin Money warns of lending dip but targets £5bn growth through Open Banking platform
Virgin Money's mortgage lending is set to come in at the lower end of expectations in 2018 amid fierce market competition, the lender today warned investors.

The bank also revealed plans to take advantage of the introduction of Open Banking next year with a digital banking platform that will “transform the outlook for the business”. It expects this to gain £10bn of new deposits within five years of launch.

Virgin Money said it was still on course for its lending target this year but that next year its share of home loans will be at the lower end of the 3-3.5% market share previously predicted, as the group looks to maintain margins and sustainable returns. In 2016 it was the eighth biggest lender with a 3.4% share of the UK mortgage market worth £8.4bn according to UK Finance figures.

Overall the UK economy remains supportive amid a resilient housing market, with house prices expected to rise by 2.1% in 2018, the lender said in a strategy update.

Its Open Banking offering will centre around a universal account that aims to take £5bn of customer deposits within five years of launch, driving an increase in customer numbers by more than 50%.

Virgin Money will also target small businesses with the launch of a savings account in January 2018, which could lead to broader offerings in the future. It expects this to gain a further £5bn in deposits over the first five years of operation.

 

New offerings to transform market presence

Chief executive, Jayne-Anne Gadhia (pictured), said: “To realise our vision for the future, we are building a differentiated, market-leading, data-driven digital bank that will be capable of meeting individual customers’ tailored needs and provide significantly more than the functionality of a current account.

“Traditional banks are investing in digital transformation but are burdened by legacy systems; while digital start-ups currently lack the customer base to disrupt the sector on any significant scale.

“Our end-to-end platform will enable us to capture market share by taking full advantage of our unique position and competitive advantages which are defined by a well-known and trusted brand, no legacy issues and an established scalable customer base.

She added: “Broadening our customer reach through our new digital and SME businesses will transform our market presence. We believe they will double our access to UK retail banking revenues.

“We will improve the depth of individual customer relationships and expect higher product penetration.

“We expect to capture around £10bn of deposits from new sources through these new initiatives within five years from launch.”

There are 0 Comment(s)

Comments are closed.

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.

Profiles

Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.

Marketwatch

Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.

Poll

Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
  • RT @ashridgepf: Well what a surprise! We love our clients and they obviously are quite fond of us. Mortgage applicants find humans more r…
  • RT @DanielleDennis9: Always love reading through the tweets of the year every December! Have a look through to recap on a great year https:…
  • RT @mortgagestall: Great to see the hard work brokers put in is getting ever-more recognised https://t.co/cg4ZaJzZJZ
Read previous post:
/IMG/317/222317/construction-generic-pic.jpg
Construction workloads grow but skills shortage and Brexit concerns remain

Workloads in UK construction and infrastructure continued to rise in Q3 2017, according to the latest RICS UK Construction and...

Close