The firm has said that in order to address the funding issues of the bank, its consortium of businesses would look to expand its range of online savings accounts and improve the profitability of Northern Rock’s mortgage book. Should the Virgin Group succeed, the move towards a building society model would make the bank less dependent on funding from the wholesale markets.
The proposals are an interesting change of tack and follow recent criticism from MPs on the bank’s decision to expand mortgage lending in the first half of the year before being bailed out by the Bank of England.
In addition to outlining its plans for the business, a number of additional investors have shown interest in the consortium. However, no major developments have been made since the Virgin Group announced its intentions last week.
Commenting, Scott Mowbray, head of public relations at Virgin Money, said: “We have had a number of new businesses interested in joining the consortium, but they cannot be named at this stage. No further developments have been made and discussions continue to be ongoing.”
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