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Virgin Money applies to become bank

November 5, 2009 by admin  
Filed under News, News-Banking

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Virgin Money has put in an application to become a fully fledged bank according to a recent report. The company, headed by Sir Richard Branson, already offers a number of financial products, but now wants to become a full service bank and has put in an application to do so.

At present Virgin Money offers credit cards, investments, and savings, but has made an application to become a full bank to the Financial Services Authority.

Whilst it could take six months or more to approve the application officials have said that if it is successful the launch of Virgin Money into the banking sector could improve competition, giving consumers more choice when it comes to financial products such as mortgages, which is an area where choice has been limited since the onset of the global credit crunch which saw banks become increasingly wary over who they would lend to.

At the start of the credit crunch, when the lender Northern Rock ran into problems, Virgin Money was a forerunner for the purchase of the bank. However, a decision was finally made to nationalise the company.

This has not affected the plans of the company to break into the full service banking industry, however, hence its decision to put in an application to this effect.

There are now plans to split Northern Rock into two, and it is thought that Virgin Money along with supermarket giant Tesco will be potential bidders.

Tesco has recently launched its own banking service and it is thought that it will be offering current accounts and mortgages by around 2011.

In the meantime Richard Branson is planning to operate his bank online should the licence come through, and this will include the offering of mortgage products.

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