The sale of Church House Trust to SAV Credit is subject to FSA approval and is expected to close in the first half of 2013.
Virgin Money declined to disclose the sale amount.
SAV Credit says the staff of Church House Trust and the bank’s Yeovil base will be retained following the sale.
SAV chief executive officer James Corcoran says: “The acquisition of Church House Trust is a significant step forward in the on-going development of SAV Credit from its core credit card business. The business provides a platform for growth in other product areas while capitalising on the experience of Graham and his team.
“In particular the deal will enable us to help drive increased competition in the savings market with simple and consistently competitive products while expanding SAV’s funding base for further sustainable growth.”
Virgin Money purchased Church House Trust in January 2010 in order to provide it with a platform with which it could enter the UK retail banking market.
The lender purchased Northern Rock in November 2011, in a deal originally estimated to be worth £747m, acquiring a second banking license in the process.
Virgin Money recently indicated it was considering a stock market floatation after leading shareholder and American investor Wilbur Ross acquired a 38 per cent stake in acquisition vehicle NBNK.