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Sir Richard Branson’s Virgin Money applies to FSA for banking licence- Virgin Bank

By Thomas Frommherz for CEOWORLD Magazine Updated:October 26, 2009

Virgin Money, the consumer credit arm of Sir Richard Branson’s Virgin Group, has applied to Britain’s Financial Services Authority for a banking licence.

The company said that it had applied for a licence to sell current accounts and mortgages to expand its business. Reportedly, Virgin Money had approached Bryan Sanderson, former chairman of Northern Rock, to become a non-executive director of the newly formed bank, to convince the FSA that it has the experience and managerial expertise to run a bank.

According to the newspaper, intially, Virgin Group was the preferred bidder for the collapsed UK bank. However, saying that the rescue plans had not provided taxpayers with enough guarantees the government nationalised it. Since then Virgin Money has been nursing the idea of entering into the banking sphere. The European Commission is expected to rule on the restructuring and subsequent sale plan of Northern Rock soon, reported the newspaper.

The move comes days after the governor of the Bank of England Mervyn King called for more competition in the banking sector as the impact of the financial crisis and state bail-outs fades.

He told an audience in Edinburgh: “As in the English Premier League, getting into the top four will not be easy for those outside it. But in both cases I hope greater competition will produce less rigidity in the composition of the top four.”

Virgin Money, which has about 200 staff, was the front runner to buy Northern Rock as it sought emergency support in the early stages of the credit crunch, but the Government eventually opted to nationalise the struggling lender in February 2008.

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