That’s the homepage of Richard Branson’s new acquisition; Church House Trust, which he is planning to use as a platform to launch a retail banking business in the UK.
Or as the man himself puts it in the offer document:
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.
The attraction of this small Somerset-based private bank, which reported a pretax profit of £450,000 in 2008 and is costing Branson £12.3m, is the fact that it has all the necessary banking permissions and good relationship with the FSA.
Indeed, the UK’s financial regulator has already approved Virgin’s application to become the controlling shareholder of Church House.
Once it has established an initial banking platform, Branson, who has long harboured an ambition to break into the retail banking market, says he will use Church House to “contemplate future acquisitions”.
Here’s a bit more on the thinking behind the deal:
The financial crisis has tarnished the reputation of many UK banks, while market concentration in the sector has increased substantially. This has created the opportunity for a new entrant to provide a better, different form of banking to its customers, thereby increasing competition in the sector. Virgin Money identified this opportunity two years ago and therefore, together with certain partners, it prepared a recapitalisation proposal for Northern Rock plc, the UK mortgage bank which was ultimately nationalised in February 2008. Research conducted by Virgin Money over the past two years has shown consistently that there is a clear consumer demand for Virgin Money to enter the banking market. The research demonstrates that Virgin Money would be both a trusted deposit taker and mortgage lender. The acquisition of Church House Trust will provide the platform from which Virgin Money will develop a retail banking business in the UK, offering a full range of products to consumers under the “Virgin Money” brand.
And some figures on the recent(ish) performance of Virgin Money, which incidentally is having to inject £37.3m of new capital into Church House Trust:
For the financial year ended 31 December 2008, (the last date to which audited accounts have been prepared), Virgin Money reported turnover of £98.4m and profit before tax of £27.5m. Virgin Money has reviewed management information for the period since 31 December 2008, as well as internally prepared forecasts under a range of different macro-economic assumptions. Under the scenarios considered, Virgin Money is expected to continue to trade satisfactorily.
The question now is what the Bearded one will look to acquire?
Related links:
Branson eyes Northern Rock – FT Alphaville
We need YOUR help to beat the beard! – FT Alphaville