Scotland business

'Strong trading' for Sainsbury's Bank

Sainsbury's sign Image copyright PA

Sainsbury's Bank is set to launch new mortgage products in 2017 after reporting a strong trading performance in the last financial year.

The announcement came as the Edinburgh-based challenger bank saw underlying profit rise by nearly 5%, to £65m.

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

Sainsbury's said it performed strongly in the personal loans market, with 15% 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% year-on-year.

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

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".

Virgin Money

Meanwhile, Edinburgh-based Virgin Money has reported a sharp rise in gross mortgage lending.

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

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

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."

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