Virgin close to bank deal

Steve Dinneen
Follow Steve
VIRGIN Money hopes acquiring a bank as early as this month could help the company become a major player in consumer finance.

It has already approached Quayle Munro, the bank founded by the chairman of parent company Virgin Group, to advise on a transaction.

It is thought Virgin's banking arm will focus on providing a comprehensive online banking service.

A Virgin Money spokesman said: "We applied for a banking licence in October and this should come through later this month at the earliest or March at the latest.
"Things will start to come to fruition in the weeks after that."

Reports emerged over the weekend that Aldermore Bank, formerly Ruffler Bank, owned by private equity firm AnaCap, was top of Quayle Munro's wish-list, costing around £50m.

But a Virgin Money spokesman spokesman denied the bank figured in its plans, claiming: "The institution mentioned over the weekend is not correct. We are not commenting on which banks are being looked at."

It is thought that the acquisition of a small bank will be the first move in a larger programme, which is likely to include snapping up assets of Royal Bank of Scotland, Lloyds Banking Group and Northern Rock.

Virgin failed to buy Northern Rock for an initial £1.3bn investment in 2008.

Virgin denied there was any conflict of interest in hiring the company founded by the chairman of Virgin Group to advise on the acquisitions. A spokesman added: "Peter Norris is the chairman of Virgin Group, not Virgin Money. We have a longstanding relationship with Quayle Munro and there is no conflict of interest as far as we're concerned."