Virgin Money
Encyclopedia
Virgin Money is a UK-based financial services
company owned by the Virgin Group
and founded by Sir Richard Branson in March 1995. It was originally known as Virgin Direct, and pioneered index tracking by launching a value Personal Equity Plan
into the market. In the 2000s Virgin Money expanded its operations around the world. In 2010 the company received a banking licence through the purchase of the Church House Trust
and has plans to expand into this sector.
On 17 November 2011 it was announced that Virgin Money were going to buy Northern Rock
plc for £747 million up front and other potential payments of up to £280 million over the next few years. The sale is expected to go through on 1 January 2012. There will be no further job losses, except for the ones already announced. Virgin have also pledged to keep the headquarters of the bank in Newcastle upon Tyne. The deal is pending regulatory and EU merger approval, and the combined business will operate under the Virgin Money brand.
during 1995 offering PEP
's and launched Virgin One
, in a partnership with Royal Bank of Scotland
, in 1997. In 2000, virginmoney.com was launched as a price comparison website. In 2001 RBS bought out Virgin's stake in the joint venture.
In 2002, Virgin Direct merged with virginmoney.com to form the current company. In the 2000s Virgin Money expanded its operations around the world. In April 2004 the Virgin Group took 100% ownership of Virgin Money, buying the remaining 50% stake for £90 million.
announced that Virgin Group
were putting together a consortium of financiers to propose to plough millions into the troubled Northern Rock
bank and in return take an approximate 30% stake in the business, bringing the current financial products offered by Virgin and combining them with Northern Rock's own financial products. By February 2008, Virgin were the favoured bidders for the bank and announced in its official submission to the government that, if successful, they would have merged Northern Rock and Virgin Money, naming the new company "Virgin Bank". The initial bid was not successful.
A further round of bidding for Northern Rock occurred during 2011. On 17 November 2011 it was announced that Virgin Money were going to buy Northern Rock plc for £747 million.
In late January Sir Brian Pitman became the Chairman of Virgin Money; Pitman had previously been an advisor to Virgin during the attempted buyout of Northern Rock in 2007. In February Pitman stated that the company was interested in acquiring some branches of other banks which lie in good locations; branches belonging to RBS and Lloyds
are possible candidates.
In April 2010 WL Ross & Co. LLC
invested £100 million in Virgin Money for a 21% stake in the company. WL Ross had previously supported Virgin Money in their previous bid for Northern Rock. James Lockhart, Vice Chairman of WL Ross, will also join the Virgin Money board.
In April 2010 the Times commented in their City Diary, about a potential Intellectual Property issue between Virgin (Church House Trust) and a small IFA based in Guildford, Surrey with a similar name, Churchouse Financial Planning.
(2005) and home loans (2008) to their product suite. In 2008, Virgin Money Australia withdrew its home loan product from the Australian market due to the financial crisis of 2007–2010 and the credit cards portfolio was transferred to its supplier, Westpac Banking Corporation, after the end of a 5-year agreement. In 2009, Virgin Money launched car insurance, partnering with A&G Insurance Services and also announced their strategic alliance with CitiBank
, with plans to launch a suite of retail banking services in 2010.
In 2006, Virgin Money South Africa launched with a credit card initially in a partnership with ABSA
.
In 2007, Virgin Money launched in the USA after the Virgin Group
made a majority stake investment in CircleLending, a company that facilitated peer-to-peer
loans. Virgin Money USA entered into dissolution on November 1, 2010, and is no longer listed as a Virgin property on the Virgin Money home page; the Virgin Money US site itself was also dismantled. Virgin Money subsequently withdrew entirely from the US market and its social lending servicing was transferred to its servicing partner, Graystone Solutions, which continues to service the social loans under its own brand.
(issued by MBNA
), prepaid cards, mortgages
(provided by The One Account
), life insurance
, car insurance, home insurance
, pet insurance
, travel insurance
(provided by InsureandGo
), savings account
s, ISA
s and pension
s.
; the inaugural Virgin London Marathon was on 25 April 2010. This sponsorship led to the creation of Virgin Money Giving, with the aim "to help all fund-raisers raise more money for good causes".
Financial services
Financial services refer to services provided by the finance industry. The finance industry encompasses a broad range of organizations that deal with the management of money. Among these organizations are credit unions, banks, credit card companies, insurance companies, consumer finance companies,...
company owned by the Virgin Group
Virgin Group
Virgin Group Limited is a British branded venture capital conglomerate organisation founded by business tycoon Richard Branson. The core business areas are travel, entertainment and lifestyle. Virgin Group's date of incorporation is listed as 1989 by Companies House, who class it as a holding...
and founded by Sir Richard Branson in March 1995. It was originally known as Virgin Direct, and pioneered index tracking by launching a value Personal Equity Plan
Personal Equity Plan
In the United Kingdom a Personal Equity Plan was a form of tax-privileged investment account. They were introduced by Nigel Lawson in the 1986 budget for Margaret Thatcher's Conservative government to encourage equity ownership among the wider population. PEPs were allowed to contain collective...
into the market. In the 2000s Virgin Money expanded its operations around the world. In 2010 the company received a banking licence through the purchase of the Church House Trust
Church House Trust
Virgin Bank Ltd trading as Church House Trust is a private British bank founded in 1978 and based in Yeovil, United Kingdom. In January 2010 the former Church House Trust plc was acquired by Virgin Money and renamed to Virgin Bank Ltd.- Origins :...
and has plans to expand into this sector.
On 17 November 2011 it was announced that Virgin Money were going to buy Northern Rock
Northern Rock
Northern Rock plc is a British bank, best known for becoming the first bank in 150 years to suffer a bank run after having had to approach the Bank of England for a loan facility, to replace money market funding, during the credit crisis in 2007. Having failed to find a commercial buyer for...
plc for £747 million up front and other potential payments of up to £280 million over the next few years. The sale is expected to go through on 1 January 2012. There will be no further job losses, except for the ones already announced. Virgin have also pledged to keep the headquarters of the bank in Newcastle upon Tyne. The deal is pending regulatory and EU merger approval, and the combined business will operate under the Virgin Money brand.
History
It launched as Virgin Direct Personal Financial Services Limited in partnership with Norwich UnionNorwich Union
Norwich Union was the name given to insurance company Aviva's British arm before June 2009. It was originally established in 1797. It is the biggest life insurance provider in the United Kingdom, and has a strong position in motor insurance...
during 1995 offering PEP
Personal Equity Plan
In the United Kingdom a Personal Equity Plan was a form of tax-privileged investment account. They were introduced by Nigel Lawson in the 1986 budget for Margaret Thatcher's Conservative government to encourage equity ownership among the wider population. PEPs were allowed to contain collective...
's and launched Virgin One
The One account
The One account Ltd is single-brand subsidiary financial services company offering offset and flexible mortgages in the UK. The company pioneered the offset mortgage in the UK and; was conceived as a joint venture between Virgin Direct and The Royal Bank of Scotland in 1997.Initially, the company...
, in a partnership with Royal Bank of Scotland
Royal Bank of Scotland
The Royal Bank of Scotland Group is a British banking and insurance holding company in which the UK Government holds an 84% stake. This stake is held and managed through UK Financial Investments Limited, whose voting rights are limited to 75% in order for the bank to retain its listing on the...
, in 1997. In 2000, virginmoney.com was launched as a price comparison website. In 2001 RBS bought out Virgin's stake in the joint venture.
In 2002, Virgin Direct merged with virginmoney.com to form the current company. In the 2000s Virgin Money expanded its operations around the world. In April 2004 the Virgin Group took 100% ownership of Virgin Money, buying the remaining 50% stake for £90 million.
Purchase of Northern Rock plc
On 13 October 2007, Sir Richard BransonRichard Branson
Sir Richard Charles Nicholas Branson is an English business magnate, best known for his Virgin Group of more than 400 companies....
announced that Virgin Group
Virgin Group
Virgin Group Limited is a British branded venture capital conglomerate organisation founded by business tycoon Richard Branson. The core business areas are travel, entertainment and lifestyle. Virgin Group's date of incorporation is listed as 1989 by Companies House, who class it as a holding...
were putting together a consortium of financiers to propose to plough millions into the troubled Northern Rock
Northern Rock
Northern Rock plc is a British bank, best known for becoming the first bank in 150 years to suffer a bank run after having had to approach the Bank of England for a loan facility, to replace money market funding, during the credit crisis in 2007. Having failed to find a commercial buyer for...
bank and in return take an approximate 30% stake in the business, bringing the current financial products offered by Virgin and combining them with Northern Rock's own financial products. By February 2008, Virgin were the favoured bidders for the bank and announced in its official submission to the government that, if successful, they would have merged Northern Rock and Virgin Money, naming the new company "Virgin Bank". The initial bid was not successful.
A further round of bidding for Northern Rock occurred during 2011. On 17 November 2011 it was announced that Virgin Money were going to buy Northern Rock plc for £747 million.
Banking ambitions
In an interview with The Times on 9 March 2009 Branson stated that he still hopes that Virgin Money can expand its operations into the banking sector; "We are going to get back into the mortgage business and we will become a bank either by acquisition or by getting our own banking licence. You will see us become a consumer bank within the next couple of years." In October 2009 Virgin Money applied to the FSA for a full banking licence.Purchase of Church House
On 8 January 2010 Virgin Money announced the acquisition of Church House Trust Plc for £12.3 million, giving Virgin a small foothold in the UK banking market. Although Church House had no branches, it gives Virgin a banking licence. Virgin are to invest a further £37.3 million of new capital into the business. The FSA have already approved the deal. On 26 January the deal was declared unconditional.In late January Sir Brian Pitman became the Chairman of Virgin Money; Pitman had previously been an advisor to Virgin during the attempted buyout of Northern Rock in 2007. In February Pitman stated that the company was interested in acquiring some branches of other banks which lie in good locations; branches belonging to RBS and Lloyds
Lloyds Banking Group
Lloyds Banking Group plc is a major British financial institution, formed through the acquisition of HBOS by Lloyds TSB in 2009. As at February 2010, HM Treasury held a 41% shareholding through UK Financial Investments Limited . The Group headquarters is located at 25 Gresham Street in London, with...
are possible candidates.
In April 2010 WL Ross & Co. LLC
Wilbur Ross
Wilbur L. Ross, Jr. is an American investor known for restructuring failed companies in industries such as steel, coal, telecommunications, foreign investment and textiles. He specializes in leveraged buyouts and distressed businesses. In 2011, Forbes magazine listed Ross as one of the world's...
invested £100 million in Virgin Money for a 21% stake in the company. WL Ross had previously supported Virgin Money in their previous bid for Northern Rock. James Lockhart, Vice Chairman of WL Ross, will also join the Virgin Money board.
In April 2010 the Times commented in their City Diary, about a potential Intellectual Property issue between Virgin (Church House Trust) and a small IFA based in Guildford, Surrey with a similar name, Churchouse Financial Planning.
International operations
In 2003, Virgin Money launched its first venture outside of the UK by introducing its credit cards in Australia. Virgin Money Australia initially launched in partnership with Macquarie Bank Pty Ltd and added superannuationVirgin Superannuation
Virgin Superannuation is a superannuation, or pension fund, offered by Virgin subsidiary Virgin Money.-In Australia:Virgin Super launched in 2005 under the Virgin Money Australia brand...
(2005) and home loans (2008) to their product suite. In 2008, Virgin Money Australia withdrew its home loan product from the Australian market due to the financial crisis of 2007–2010 and the credit cards portfolio was transferred to its supplier, Westpac Banking Corporation, after the end of a 5-year agreement. In 2009, Virgin Money launched car insurance, partnering with A&G Insurance Services and also announced their strategic alliance with CitiBank
Citibank
Citibank, a major international bank, is the consumer banking arm of financial services giant Citigroup. Citibank was founded in 1812 as the City Bank of New York, later First National City Bank of New York...
, with plans to launch a suite of retail banking services in 2010.
In 2006, Virgin Money South Africa launched with a credit card initially in a partnership with ABSA
ABSA
ABSA may refer to:* ABSA Cargo Airline, a cargo airline* Absa Group Limited, the largest consumer bank in South Africa* African Baseball & Softball Association* Australian Bird Study Association, an ornithological organization...
.
In 2007, Virgin Money launched in the USA after the Virgin Group
Virgin Group
Virgin Group Limited is a British branded venture capital conglomerate organisation founded by business tycoon Richard Branson. The core business areas are travel, entertainment and lifestyle. Virgin Group's date of incorporation is listed as 1989 by Companies House, who class it as a holding...
made a majority stake investment in CircleLending, a company that facilitated peer-to-peer
Peer-to-peer
Peer-to-peer computing or networking is a distributed application architecture that partitions tasks or workloads among peers. Peers are equally privileged, equipotent participants in the application...
loans. Virgin Money USA entered into dissolution on November 1, 2010, and is no longer listed as a Virgin property on the Virgin Money home page; the Virgin Money US site itself was also dismantled. Virgin Money subsequently withdrew entirely from the US market and its social lending servicing was transferred to its servicing partner, Graystone Solutions, which continues to service the social loans under its own brand.
Products
Virgin Money currently offers a number of products, most of which are run in conjunction with other financial service providers. As of 2010 it offers the Virgin Credit CardVirgin Credit Card
Virgin Credit Card is a brand of credit card launched by Sir Richard Branson's Virgin Group and is available in South Africa and the United Kingdom through Virgin Money.-United Kingdom:...
(issued by MBNA
MBNA
MBNA Corporation was a bank holding company and parent company of wholly owned subsidiary MBNA America Bank, N.A., headquartered in Wilmington, Delaware, prior to being acquired by Bank of America in 2006...
), prepaid cards, mortgages
Mortgage loan
A mortgage loan is a loan secured by real property through the use of a mortgage note which evidences the existence of the loan and the encumbrance of that realty through the granting of a mortgage which secures the loan...
(provided by The One Account
The One account
The One account Ltd is single-brand subsidiary financial services company offering offset and flexible mortgages in the UK. The company pioneered the offset mortgage in the UK and; was conceived as a joint venture between Virgin Direct and The Royal Bank of Scotland in 1997.Initially, the company...
), life insurance
Life insurance
Life insurance is a contract between an insurance policy holder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness may also trigger...
, car insurance, home insurance
Home insurance
Home insurance, also commonly called hazard insurance or homeowner's insurance , is the type of property insurance that covers private homes...
, pet insurance
Pet insurance
Pet health insurance pays the veterinary costs if one's pet becomes ill or is injured in an accident. Some policies will also pay out when the pet dies, or if it's lost or stolen....
, travel insurance
Travel insurance
Travel insurance is insurance that is intended to cover medical expenses, financial default of travel suppliers, and other losses incurred while traveling, either within one's own country, or internationally...
(provided by InsureandGo
InsureandGo
InsureandGo is a private limited insurance company based in the United Kingdom.They mainly specialise in travel insurance, but also provide computer and gadget insurance products...
), savings account
Savings account
Savings accounts are accounts maintained by retail financial institutions that pay interest but cannot be used directly as money . These accounts let customers set aside a portion of their liquid assets while earning a monetary return...
s, ISA
Individual Savings Account
An Individual Savings Account is a financial product available to residents in the United Kingdom. It is designed for the purpose of investment and savings with a favourable tax status. Money is contributed from after tax income and not subjected to income tax or capital gains tax within a holding...
s and pension
Pension
In general, a pension is an arrangement to provide people with an income when they are no longer earning a regular income from employment. Pensions should not be confused with severance pay; the former is paid in regular installments, while the latter is paid in one lump sum.The terms retirement...
s.
Virgin Money Giving
Virgin Money Giving is a charitable not-for-profit company set up by Virgin in October 2009. From 2010 the Virgin Group signed a five-year deal to be the official sponsor of the London MarathonLondon Marathon
The London Marathon is one of the biggest running events in the world, and one of the five top world marathons that make up the World Marathon Majors competition, which has a $1 million prize purse. It has been held each spring in London since 1981. The race is currently sponsored by Virgin Money,...
; the inaugural Virgin London Marathon was on 25 April 2010. This sponsorship led to the creation of Virgin Money Giving, with the aim "to help all fund-raisers raise more money for good causes".
Sponsorship
Virgin Money leads the sponsorship of the 2010 London Marathon. Virgin Money also lent its name to the yacht that Sir Richard Branson used to attempt to break the transatlantic record.Board
As of 28 January 2010 the board of Virgin Money is composed of:- Chairman - Sir Brian Pitman (deceased).
- Non-Executive Directors - Norman McLuskie and Colin Keogh
- Directors - Gordon McCallum and Patrick McCall
- Chief Executive Officer - Jayne-Anne Gadhia
- Chief Finance Officer - Finlay Williamson
- Chief Risk Officer - Marian Watson
- Chief Operating Officer - Roland Russell
- Chief Marketing Officer - Paul Lloyd
- Corporate Development Director - David Dyer