Virgin Money To Launch Bank
Virgin Money the consumer credit wing of the Virgin empire has applied for a full banking licence.
Virgin Money made their application to the FSA(Financial Services Authority) two weeks ago. The application can take up to 6 months to go through the system but if passed, which is probably a given, Virgin Money plant to open an online bank offering to take deposits and provide mortgages.
Their strategy is to build an Internet presence and develop a branch network on the back of this. As a part of this process the new company will investigate acquisitions as part of this process. A second bid for Northern Rock is a possibility.
A consortium is probably the route, with private equity, that Virgin will take with the acquisitions.
They are currently in discussions with Bryan Sanderson, who was chairman of Northern Rock briefly following its nationalisation early last year, with a view to bringing him on board as non-executive director. Virgin are also talking to Norman McLuskie, chairman of RBS retail division until 2005, with a view to him joining the non-executive board.
Northern Rock are planning to split the bank in to two with £20bn of good assets ‘good bank’ and £60bn – £80bn of bad loans ‘bad bank’. The European Commission is likely to clear the proposal next week providing that Northern Rock agrees to fundamental restrictions on pricing and market share.
Virgin Money is thought to be the most likely buyer of the new ‘good bank’ Northern Rock.
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Tags: Bad Loans, Consumer Credit, Financial Services Authority, Mortgages, Rbs, virgin bank, Virgin Empire, Virgin Money
