Edinburgh challenger banks continue rise

Sainsbury’s, which is based at Edinburgh Park, said underlying profit rose by nearly 5 per cent, to £65m last year.

Total income was also up more than 5 per cent to £274m in the year to 12 March.

Sainsbury’s said it performed strongly in the personal loans market, with 15 per cent year-on-year growth in the number of advances to new customers.

The bank’s portfolio of insurance products also continued to perform well, resulting in new business growth of more than 10 per cent year-on-year.

The lender also took the chance to announce the launch of new mortgage products in 2017.

Sales of new home insurance policies increased by more than 25 per cent.

In an interim results statement, Sainsbury’s said: “Given the bank’s strong trading performance and the trust people have in the Sainsbury’s brand, we have decided to launch new mortgage products in 2017.

“We believe these products will complement our existing financial services portfolio and we expect customers to respond well.”

Sainsbury’s also reported that it was “making good progress” in moving towards “a new, more flexible” banking IT platform.

It forecasts total transition costs to be “at the top of the £340m to £380m range”.

Meanwhile, fellow capital-based challenger, Virgin Money, also posted positive results, in this case for the first three months of this year when gross mortgage lending rose sharply.

The bank said lending climbed by year-on-year by 30 per cent in the first quarter to a record £2.1bn, giving the bank a market share of 3.4 per cent.

The bank added that residential gross mortgage lending increased by 35 per cent, while buy-to-let lending was up by 17 per cent.

Credit card balances surpassed £1.8bn at the end of the quarter, up from £1.6bn as at 31 December.

Virgin Money said it was looking towards an “accelerated target” of £3bn of credit card “outstandings” by the end of 2017.

Chief executive Jayne-Anne Gadhia said: “I am delighted to report it has been another excellent quarter for Virgin Money.

“We had a record start to the year for mortgages and our savings franchise continues to flourish with a strong inflow of cash ISAs.

“I am particularly pleased with the performance of the credit card business which continues to exceed expectations one year on since launching to the public.”