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Virgin Money moves into retail banking sector
Richard Branson hopes purchase of Church House Trust will helps his bid for Northern Rock
Sir Richard Branson's Virgin Group has finally gained a foothold in Britain's retail banking sector. Virgin Money has bought the small Somerset-based bank Church House Trust (CHT) hoping the purchase will act as a springboard in its renewed bid to own a slice of national mortgage giant Northern Rock.
Virgin Money announced today that it will pay £12.3m for the bank. It will also inject £37.3m of new capital into the business.
In contrast to Virgin's next target, Northern Rock, CHT is a minnow. But Branson is hoping that the deal, which has been approved by the Financial Services Authority, will give his empire's financial arm a "strong platform for growth. Virgin Money aims to bring simplicity to the UK banking market which has traditionally been a complex sector".
Virgin Money currently has around 2.5 million customers. It already offers credit cards, savings and investment products, including pensions and bonds, as well as general insurance and life assurance products. Securing a banking licence via its acquisition of CHT is the first step in creating a Virgin bank on the high street.
Two years ago Virgin Money failed in its bid to buy Northern Rock prior to the failed lender's nationalisation. This week it emerged that Virgin has registered its interest in buying the "good bank" part of Northern Rock after Treasury decided to split the Rock into a good bank - comprising the Rock's branch network, savings accounts and prime mortgages - and a "bad bank" containing its non-performing assets.
Jayne Anne Gadhia, chief executive of the Virgin Group, said Virgin Money hoped to offer consumers a different banking experience. "The financial crisis has tarnished the reputation of many UK banks," she said. "Our aim is to make 'everyone better off' in the way we do business, by offering good value, treating employees well, making a positive contribution to society and delivering a growing profit to shareholders." ·
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Well if Mr Branson can change the face of UK banking good luck to him. However, what is needed is a change to this apparent greed formation that is rife throughout the banking industry. What you have to consider is, would you recommend your bank to a friend, due to the activities and lack of understanding I have had from my bank this would be a resounding NO. How do you feel about your bank?
Because of the recession that we are experiencing today, many people are getting their own payday loans. Even though if we already experience the economic recovery there is also possibility that this will also get high.