Big banks in Virgin territory

Virgin MoneyAustralia, the financial services arm of the Virgin Group, has revealed that it will not rule out the possibility of local acquisitions despite plans to rescue struggling British mortgage lender Northern Rock.

Virgin Money Australia chief executive David Wakeley said yesterday that the company’s ambition for financial services is to provide customers with great value for money products and services in competition with large financial institutions.

“Housing affordability is a hot topic right now, with home owners feeling the heat from rising interest rates. Now more than ever the market needs competition to keep the big banks on their toes, otherwise we’re likely to see interest rates skyrocket,” he said.

Virgin Money, which is backed financially by the Virgin Group and Macquarie Bank, launched in Australia in 2003 with plans to shake up financial services, and the company’s assets are growing rapidly. It now has credit card assets of almost $2 billion, and intends to add more scale to the business, according to Wakeley, who said Virgin Money has access to deep pockets.

“While there is talk about market consolidation as a result of economic conditions and the banks keeping a watchful eye on the smaller non-bank players, it’s a different story for heavy-hitters like Virgin turning the tables on the big banks,” he said.

Should the Virgin Group’s offer to rescue Northern Rock go ahead, Sir Richard Branson is expected to fold the British bank’s branches and assets into Virgin Money.