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Virgin Money sets eyes on retail banking sector

Virgin Money sets eyes on retail banking sector

Category: Banking

Updated: 29/01/2010
First Published: 08/01/2010

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Virgin Money has gone some way to establishing itself in the retail banking sector with the acquisition of regional bank Church House Trust.

Virgin Money, which currently has over 2.5 million customers, is to pay just under £12.3 million for the bank and has pledged to invest £37.3 million into the business.

"The Church House Trust business offers us a strong platform for growth. Virgin Money aims to bring simplicity to the UK banking market which has traditionally been a complex sector," said Sir Richard Branson, founder of the Virgin group.

Mr Branson is thought to have wanted Virgin Money to enter the retail banking sector for some time, with the business failing in a bid to buy Northern Rock before the lender was nationalised.

Mortgages and savings products will be available under the Virgin Money brand as a result of the acquisition.

"The sale of Church House Trust to Virgin Money represents a good outcome for the business, its shareholders and its customers," David Batten, chairman of Church House Trust, said.

"Church House Trust's conservative business model has proven to be attractive to Virgin Money as a sound base from which to fulfil its banking ambitions."

Chief executive of Which?, Peter Vicary-Smith, said consumers would welcome a new presence on the High Street.

"New entrants in the market offering genuinely competitive products should spur other banks into working harder to keep their customers happy, which should result in better products and higher levels of service," he added.

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