Richard Branson wasn’t just talking himself up when he said earlier this year that the recession would throw up plenty of business opportunities.
His latest idea is to get into the banking sector by launching on online bank in Britain under the Virgin Money brand, which operates in Australia selling superannuation and home loan products.
What Branson is banking on is the level of distrust and anger felt by consumers towards big banks, particularly in Britain, where a number of major banks have been brought to the brink of collapse by the global financial crisis.
“We must reintroduce competition through greater private initiative. A state-controlled banking system will not attract or keep the best talent,” Branson wrote in The Evening Standard.
“The Government has the ability to exert considerable influence over the sector, given its big shareholdings in many banks. The sale of these stakes must promote competition and Government should look to break up the larger groups as soon as is possible.
“We must ensure that we prevent such a crisis again – but we must also bring back competition if we want the consumer and small businesses to be protected.”
Virgin Money is apparently poised to apply for a British banking licence and is considering a number of different options for its banking play – an internet-only bank, a partnership with an existing bank that would allow it to have a retail presence, or a stand-alone branch network.
There is no timing for the move, although Virgin Money’s British chief executive Jayne-Anne Gadhia is already said to be scouting possible deals and investors.
Opening a bank at a time when households around the globe are struggling financially might not sound like the smartest idea, but the global financial crisis has created the perfect opportunity for Branson.
Not only are customers rightly angry with traditional banks, but Branson’s competitors are in disarray at worst and distracted at best.
Oh, and another great Branson venture also appears set for a recession launch date – Virgin Galactic’s spaceships, which are designed to take travellers into space, are set to be ready for testing in December. Here’s hoping the recession hasn’t reached beyond the Earth’s atmosphere yet.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
