Virgin Money is planning to launch a UK Internet bank in a bid to take advantage of public anger at traditional high street outfits, according to the Observer newspaper.
The financial services arm of Richard Branson's empire is preparing to apply to the Financial Services Authority for a banking licence that would allow it to take deposits and offer mortgages.
Virgin Money was launched in 1995 and claims over two million UK customers, offering credit cards, personal loans, savings products and insurance. Sales rose from around £70 million to £100 million in 2008 with profits estimated at £30 million.
The unit is now looking to follow the lead of Tesco and push much further into financial services, taking advantage of public anger at traditional banks.
Tesco bought out RBS to take complete control of Tesco Personal Finance in December and plans to open 30 bank branches in its stores by the end of the year. Another retailer, Boots is also considering following Tesco's lead.
The Observer says Branson is now in discussions with US investment banks over financial backing and is also talking to advisers about a new bid for failed bank Northern Rock.
Branson is said to be considering three options: launching a new bank with a branch network; teaming up with another finance firm; or joining a consortium to buy a troubled bank like Northern Rock.
Branson plans launch of Virgin internet bank - The Observer