Virgin Money bought Church House Trust in January 2010 because it wanted a banking licence, avoiding the arduous process of applying for one from scratch.
But because it bought much of the bailed-out Northern Rock from the government, Virgin Money now has two licences.
That allows it to sell the spare – in the form of Church House Trust – on to SAV Credit.
Sir Richard Branson’s finance outfit paid £12.3m for Church House Trust, but the re-sale price is not yet known.
The unit being sold has 30,000 customers, with £50m in deposits and £20m in mortgages.
By buying the bank and its licence, SAV Credit will be allowed to take deposits, giving it another source of funding and ending its reliance on the wholesale markets.
The deal also means Church House Trust’s 10 jobs in Yeovil will be kept, while the firm’s 30,000 customers should be unaffected.