Virgin Money has postponed the implementation of its SME lending unit due to financial uncertainty resulting from Brexit, as revealed in its half year results.

In their half-year results report, the Newcastle-based challenger bank announced it would defer its SME and unsecured lending plans.

This decision comes as Virgin Money revealed underlying profit before tax of £101.8m (€120.8m) in H1 2016, an increase of 53% on the previous year.

Virgin Money chief executive Jayne-Anne Gadhia said: “Our strategy is focused on creating a business that can continue to grow, maintaining our excellent asset quality and successfully delivering sustainable shareholder returns through the economic cycle.

“As part of this, we have decided that it is prudent to defer our SME and unsecured lending plans and focus investment on enhancing our digital capability.”

Virgin Money’s loan-to-deposit ratio rose 2.3% from H1 2015 to 109.6%, and return on tangible equity (RoTE) increased to 12.2%. Gross mortgage lending was £4.3bn (€5.1bn), 19% higher than H1 2015.

The bank declared an interim share dividend of 1.6 pence (2¢) per share, and pledged to “fund growth in the most cost efficient way.”

Virgin Money stated: “We are delighted that we have delivered strongly against our objectives in H1 2016,”

“We will continue to put customers at the heart of everything we do.”