Virgin Money applies for banking license

Virgin Money applies for banking license

Virgin Money has applied to the UK's Financial Services Authority for a full banking license as it plans to start taking deposits and offering mortgages online.

It has been widely expected that a license application would be put in by the financial services arm of Richard Branson's empire ever since its failed attempt to buy Northern Rock in 2007.

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.

If a license is granted, it is now expected to initially offer products online before building a branch network. This would be partly achieved through acquisitions, with a second bid for Northern Rock widely touted.

The nationalised lender is set to be split by the government into "good" and "bad" banks. The good bank could then be sold off to a new market entrant to claw back some public money and increase competition in the sector.

However, Virgin could face competition for the Rock from Tesco, which is also aggressively expanding its financial services unit in a bid to take advantage of public disillusionment with traditional high street players.

Comments: (1)

Gary Wright
Gary Wright 26 October, 2009, 12:32Be the first to give this comment the thumbs up 0 likes

Are we seeing the new wave of Banks with trusted names beggining to replace High Street Banks with names in the mud and no longer trusted?

I predict that after Tesco, Asda and Virgin we will see more. The pressure on established banking brands is going to only increase