British entrepreneur Richard Branson is closing in on his goal of launching a retail bank, with the British arm of his Virgin Money division applying for a UK banking license.
Virgin Money applied for the license around two weeks ago, but only announced the move on the weekend.
The application process typically takes up to six months. After that, Virgin Money could begin taking deposits and selling mortgages online.
However, the establishment of a “High Street” brick-and-mortar banking chain remains an aim for Branson and Virgin Money.
Many banking analysts believe the license application could be a precursor to Branson launching a takeover for Northern Rock, while was bailed out by the British Government in early 2008 and remains a state-owned business.
Branson attempted to bid for Northern Rock as it teetered close to collapse in February last year, but was ultimately unsuccessful.
The British Treasury now wants to divide Northern Rock into two parts: a so-called “good” bank (which would contain savings operators and good-quality loans) and a “bad” bank (which would contain the bank’s riskier mortgages and other loans).
The “good” bank would then be sold off. The list of interested bidders is expected to include Virgin and supermarket chain Tesco.
Virgin has moved to boost the banking management experience in its ranks. Virgin Money is now led by former Royal Bank of Scotland executive Jayne-Anne Ghadia is reportedly attempting to hire Bryan Sanderson, a former chairman of Northern Rock.
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.
