Virgin enters UK banking market
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Virgin Money has entered the UK banking market and bought small retail bank Church House Trust.
House Trust, has already been approved by the Financial Services Authority and the acquisition will provide the platform from which Virgin Money will develop a retail banking business in the UK.
A range of products will be offered to consumers under the Virgin Money brand.
Church House Trust is a regional bank offering deposits and mortgages, it has no reliance on wholesale markets for funding.
Following the acquisition of Church House Trust, Virgin Money will be well capitalised with an initial Tier 1 ratio in excess of 35% and will inject £37.3m of new capital into Church House Trust.
For the financial year ended 31 December 2008, Church House Trust reported operating income of £4.05m and profit before tax of £0.45m
Jayne Anne Gadhia, chief executive of Virgin Money says: “The financial crisis has tarnished the reputation of many UK banks. Virgin Money will provide a better, different form of banking to its customers, increasing competition in the sector. Our aim is to make ‘everyone better off’ in the way we do business by offering good value to customers, treating employees well, making a positive contribution to society and delivering a growing profit to shareholders.
“Our approach to banking is founded on developing a sustainable, savings-based business. We see the acquisition of Church House Trust as a strong and sensible first step in delivering Virgin Money’s banking ambition”.
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Readers' comments (4)
Anonymous | 8 Jan 2010 10:16 am
For the first time in a long long time, last night’s TV advert for Nat West (you know, the sycophantic one) mentioned "mortgages", until now it' all been about savings and investments! With this news of Virgins acquisition and Northern Rocks disposal of its "good bank” it looks to me as though the banks are gearing themselves up for a return to mortgage lending?
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Anonymous | 8 Jan 2010 10:55 am
The question is will Virgin really offer value for money on their banking products?. Judging by their poor offerings in the pensions and investment world, where you pay well over the odds for a basic tracker I fear not.
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Rob Jupp, Savills Lending Solutions | 8 Jan 2010 12:25 pm
The mortgage market badly needs new liquidity and greater competition. Virgin Money will give both of these in 2010 and I suspect, in significant volumes. I would think that they may also look at being very innovative and if so should be a great partner with those experienced and professional mortgage advisors who have demonstrated that they can survive the worst downturn in a lifetime. A warm welcome to the team at Virgin Money.
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Anonymous | 8 Jan 2010 5:23 pm
I would love to know the set up of the new take over. Has Branson a former bankrupt got anything to do with the board?
Also why take over Church House Trust but for the paperwork?
They have done a minor amount of lending much of it on non standard construction albeit at sensible and safe LTV's. But who wants a book of poor assets especially in today's climate even if they stand at 70% max LTV?
One hing I will say is have a healthy respect for how Church House Trust operated by only lending money on deposit and not seeking external funding. I suspect this may change as Virgin start to chase volume the same way Northern Rock did.
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