Virgin Money, which had applied for a banking licence from the Financial Services Authority (FSA), is in negotiations to acquire a small UK bank as part of its plans to offer a range of financial products like mortgages and current accounts, reported the Financial Times.
Reportedly, FSA may give Virign green signal to acquire the small lender and take control of its licence by early January 2010, before granting banking licence to Metro Bank and a venture backed by Panmure Gordon, a corporate and institutional stockbroker and investment bank.
Acquiring an already established bank is expected to give Virgin a ready-made branch network and retail deposit base at a time when majority of customers are not satisfied with the service of some of the high profile banks.
However, Stephen Alambritis, a spokesman at the Federation of Small Businesses, said: “The major high street banks have such a monopoly and it is very difficult for smaller operators to wedge themselves in. It is also very difficult for business customers to switch from one account to another, even if there is more competition,” reported the newspaper.
