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Increased funding costs and a reduction in available credit saw Virgin Money scale back on residential mortgage origination at the start of May.
“The financial markets have had a different and unfortunate shake-up, which has pushed the cost of funding to a level where it is difficult for us to pass savings on to new home loan customers,” said Virgin Money CEO David Wakeley.
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“Our brand philosophy is centred on doing what’s best for the customers so we will continue to provide service to our existing customers and scale back origination of new residential mortgages,” he said.
The group stated that it will be “business as usual” for their existing customer base and new mortgage business would continue to be written – albeit at reduced volumes.
Virgin Money was also adamant that the decision had no impact on Macquarie’s shareholding with the business and that the two groups would continue to work together to identify new opportunities for the future.
Virgin Money will now focus on building its own portfolio of financial services products including Virgin Super, and soon, Virgin Money Personal Loans.
Published: 14-05-08
