Virgin takes the next step towards retail banking
Acquisition of regional private bank Church House Trust offers Virgin Money a platform to “bring simplicity to the UK banking market.”
Virgin Money has announced plans to acquire Somerset-based private bank, Church House Trust. The deal marks the long-expected first steps into retail banking by Virgin Money, which failed in its attempt to acquire Northern Rock in 2008.
The offer, which values Church House Trust’s equity at £12m, sees £37m in investment from Virgin Money, and has already secured the backing of the Financial Services Authority (FSA).
Virgin Money currently has 2.5m customers across the UK, offering savings, loans, and investment services. Earlier this week, it was reported the company was interested in obtaining assets from both Lloyds Banking Group and Royal Bank of Scotland. Additional targets are said to include SME and saving specialists, Aldermore.
Sir Richard Branson, Founder of the Virgin group said: “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.”
Jayne Anne Gadhia, Chief Executive of Virgin Money said: “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”.
David Batten, Chairman of Church House Trust said: “The sale of Church House Trust to Virgin Money represents a good outcome for the business, its shareholders and its customers. 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.”