Pitman: Virgin Money to buy state assets

VIRGIN Money could pick up assets on the cheap from the UK’s government-supported banks, chairman Sir Brian Pitman suggested yesterday.

Setting out the ambitious target of growing revenues and customer numbers by 15 per cent annually, the 78-year-old said Virgin Money would pursue a combination of organic and bolt-on expansion.

Pitman, a former chief executive of Lloyds TSB, said the regulatory landscape favoured buyers as institutions such as RBS are forced to divest assets as a condition of taxpayer aid.

“We will be able to negotiate quite hard … We could find banks that are not being sold off at high prices,” he said in an interview.

Virgin Money, led by chief executive Jayne-Anne Gadhia, will need to set up at least 100 high street outlets to compete with the likes of Barclays and HSBC. The group has been running the rule over 312 branches put up for sale by RBS, around 600 branches from Lloyds and the entire Northern Rock business.

It is understood discussions will continue at a steady pace. RBS and Lloyds have until 2014 to get rid of the assets, meaning a sale could still be some time away.

Sir Brian, who was appointed last week, pointed out Virgin Money already had 2.5m customers and a well-known brand. He said the furore over risk-taking by deposit-taking institutions’ investment banking arms and executive pay presented an opening for a simple, low-risk proposition, adding: “[Banks] are getting close to being detested.”

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Sir Brian Pitman advised Virgin Money on its first play for Northern Rock in early 2008Other key figures brought in recently include Norman McLuskie and Colin Keogh as non-executive directors and Roland Russell as COO