Richard Branson’s Virgin Money is set to enter the banking world and purchase Church House Trust for £12.3 million. Virgin, who were rumoured to be in the hunt for Northern Rock, plan to invest a further £37 million in the Somerset based bank and will offer banking, saving and mortgage products.
Virgin Money’s Chief Executive Jayne Anne Gadhia, said they aim to provide a different type of banking experience and “make everyone better off by offering good value, treating employees well, making a positive contribution to society and delivering a growing profit to shareholders."
The deal will enable Virgin to grow their range of products through the banking licence already held by Church House. Holding the licence, could offer the opportunity to buy only parts of Northern Rock should they so wish, as they would not need to buy the whole, in order to secure the Rock’s banking licence.
Alternatively, the move could allow another buyer such as Tesco, a clear run at Northern Rock.
Virgin is already a well established provider of services such as credit cards, ISA’s and life assurance, but the addition of banking will be a welcome boost for consumer choice, coming at a time when many established providers have had their reputation severely dented.