Virgin Group Unit Applies For Banking Licence In UK

Published: 26-Oct-2009

Intends to sell current accounts and mortgages to expand its financial services business

In a step widely considered to be in preparation for a takeover bid for Northern Rock, Virgin Money, part of Richard Branson's Virgin Group, has applied to the UK Financial Services Authority (FSA) for a banking licence – reported Wall Street Journal.

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.

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