Virgin Money grabs bigger piece of mortgage lending pie

* Q1 gross mortgage lending up 34 pct at 1.6 bln stg

* Sees (Shanghai: 600481.SS - news) strong Q2 mortgage pipeline

* Expects 2015 net interest margin of up to 160 bps

* Focused on growing organically - CEO

* March British consumer credit up by 1.24 bln stg - BoE (Shenzhen: 000725.SZ - news) (Adds CEO comments, analyst comment, details; updates share movement)

By Aashika Jain

May 1 (Reuters) - British bank Virgin Money Holdings (UK) Plc said gross mortgage lending jumped 34 percent in the first quarter, helping it win a 3.6 percent share of the UK mortgage market.

The bank, backed by founder Richard Branson and U.S. financier Wilbur Ross, said it started the second quarter with a strong mortgage pipeline and continued to expect net interest margins of up to 160 basis points in 2015.

"We have reasonably been able to achieve a 3-3.5 percent mortgage lending market share till date, which is at the top end of our expectation outlined at the time of the float," Chief Executive Jayne-Anne Gadhia, the first female CEO of a listed British bank, told Reuters.

Gross mortgage lending rose to 1.6 billion pounds ($2.46 billion) while net mortgage lending increased 82 percent during January-March to 664 million pounds.

Mortgage balances at March 31 were 22.6 billion pounds, up 3 percent from end-2014.

"We continue to be positive about growth prospects for the franchise and the ability to meet its targets given the low reliance on base rate rises to achieve NIM growth," Canaccord Genuity said in a note.

The Newcastle-based lender's gross mortgage lending share is based on Bank of England (BoE) data for January and February and the Council of Mortgage Lenders estimate for March.

Lending to British consumers jumped in March by its biggest amount since before the financial crisis and business borrowing showed its strongest rise in at least four years, the BoE said.

CONSOLIDATION HOPES

Virgin Money, which went public in November, has been looking to challenge Britain's big lenders - Lloyds Banking (Xetra: 871784 - news) Group, Royal Bank of Scotland (LSE: RBS.L - news) , Barclays (Swiss: BARC.SW - news) and HSBC Holdings (Xetra: HBC2.DE - news) .

Spanish bank Sabadell's offer for TSB Banking (LSE: TSB.L - news) Group, a rival to Virgin Money, has fuelled expectations of consolidation among smaller banks as they strive to gain the scale required to take on larger rivals.

OneSavings Bank Plc (LSE: OSB.L - news) also said in March that it was open to takeover offers and was hoping for more consolidation.

CEO Gadhia, however, declined to speculate on any possible acquisitions.

"We don't have any particular imperative at this point in time to look at anything other than strongly continuing to grow organically," she told Reuters.

The FTSE-250 component's shares rose as much as 2.1 percent to 402.3 pence on Friday morning. ($1 = 0.6517 pounds) (Reporting by Aashika Jain in Bengaluru; Editing by Gopakumar Warrier)