By Emma Rumney
LONDON (Reuters) - Virgin Money <VM.L> on Thursday revived plans to enter the small to medium-sized business (SME) banking market, one year after shelving them due to an uncertain outlook for Britain's economy following its vote to leave the European Union.
One of the largest of a new breed of so-called 'challenger' banks that sprung up in Britain after the 2008 financial crisis, Virgin Money said it would now open an SME banking business in January 2018.
The bank said it is targeting 5 billion pounds worth of SME deposits within five years.
Jayne-Anne Gadhia, the bank's chief executive, said the move would help transform Virgin Money's market presence.
"This will... lay the foundations for potential broader future development in this attractive, but poorly served market," she said.
Although the British economy has showed some signs of a slowing down in recent months, it has so far largely resisted the dire predictions made before and after the vote to leave the European Union in June 2016.
Virgin Money said the economy remained supportive, with low unemployment, a resilient housing market and, in its experience, robust consumer demand and stable customer behaviour.
The bank said it remained largely on track to hit its full-year targets, but said its share of gross mortgage lending was likely to be at the lower end of its previously guided range of 3 to 3.5 percent in 2018.
Virgin Money also laid out plans for its "digital bank" - a platform due to start a trial in the second half of 2018 and launch fully the following year.
The bank said it hoped the new digital current account would get 5 billion pounds of customer deposits within five years.
Gadhia said the combination of upcoming technological and regulatory changes due to hit next year will level the playing field in the British retail banking industry considerably.
This created a "compelling opportunity" for Virgin Money, she said, adding the bank hoped to increase its customer numbers by 50 percent from the current 3.3 million.
(Additional reporting by Lawrence White; Editing by Edmund Blair)