Virgin Money

Virgin Money

Type	Private (Limited liability)
Founded	3 March 1995 (1995-03-03)
Founder(s)	Richard Branson
Headquarters	Edinburgh, United Kingdom
Number of locations	75 branches
Area served	UK, Australia, South Africa
Key people	Sir David Clementi (Chairman) Jayne-Anne Gadhia (CEO)
Services	Finance Banking Mortgages
Owner(s)	Virgin Group W.L. Ross (44%) Stanhope
Employees	More than 2000 (as of 2012)
Subsidiaries	Virgin Bank Northern Rock
Website	www.virginmoney.com

Virgin Money is a UK-based bank and 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, and in 2012 it purchased Northern Rock.

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 went through on 1 January 2012.

History

It launched as Virgin Direct Personal Financial Services Limited in partnership with Norwich Union on 3 March 1995 offering PEP's and launched Virgin One, in a partnership with Royal Bank of Scotland, in 1997. In 1997 Australia's AMP bought Norwich Union's 50% stake in Virgin Direct. 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 from AMP's HHG arm.

In 2007 Virgin made a bid to acquire the Northern Rock bank; this initial bid failed. 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. In February 2011 they announced their intention to lease a large office in Edinburgh.

In 2010 Virgin acquired a private bank with no branches, Church House Trust. 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. Following Pitman's death Sir David Clementi was appointed Chairman.

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 November 2011 Virgin agreed to purchase Northern Rock plc, the bank they had previously made a bid for, taking it out of nationalisation. The deal was finalised on 1 January 2012.

Corporate affairs

The logo of Virgin Money UK prior to the purchase of Northern Rock. This logo is still used by Virgin Money outside of the United Kingdom, as well as by other entities such as Virgin Money Giving. It had also been in use as the logo of Virgin Money US.

Identity

The logo of Virgin Money circa. 2003.

The logo of Virgin Direct circa. 2000.

Virgin Money's logo is focused around the main logo of Virgin Group, which is an underlined word 'Virgin' in a red and magenta gradient coloured circle. This logo was first used in 2012 to signify the merger/purchase of Northern Rock, who used to use a magenta coloured logo.

Virgin Money's older logo was the word 'Virgin' in a red rounded skew rectangle, similar in shape to a credit card, followed by the word 'Money'. This logo is still in use outside of the United Kingdom, in countries such as South Africa and Australia, and had been used by the short-lived Virgin Money US. A variant of that logo is still also used by Virgin Money Giving. Virgin Money's logo before that had used a red logo with the word 'Virgin' in a large circle and three smaller circles above the word 'Money'. Virgin Direct's logo had been a more simplistic rendering of the company name, in white on top of a red rectangle with a semicircle attached on the left side.

Virgin Money's January 2012 television advert which showcases a number of Virgin companies was directed by Duncan Jones and worked on by Beattie McGuinness Bungay.

Board

As of 9 January 2012 the board of Virgin Money is composed of:

• Non-Executive Chairman - Sir David Clementi
• Non-Executive Directors - Norman McLuskie, Colin Keogh, Jim Lockhart
• Directors - Gordon McCallum, Patrick McCall
• Chief Executive Officer - Jayne-Anne Gadhia
• Chief Finance Officer - Finlay Williamson
• Chief Risk Officer - Marian Watson
• Chief Operating Officer - Mark Parker
• Chief Marketing Officer - Paul Lloyd
• Corporate Development Director - David Dyer

Location

Virgin Money's headquarters are at Discovery House in Norwich, but in 2011 they added large offices in Edinburgh, and in 2012 along with Northern Rock they acquired the bank's headquarters in Gosforth, Newcastle upon Tyne. The Newcastle site, named Northern Rock House, is next to the Regent Centre business park and comprises two black and grey buildings built in the 1990s and some additional sandstone and glass buildings built in the early 2000s. Some staff of the Government owned company UK Asset Resolution also use the Newcastle site, but are to leave by 2013. Partnership House which was built on the site of the former Northern Rock Tower is not owned by Virgin, as it was sold by the bank while under Government ownership. The company also has offices in London. The Chief Executive Officer Jayne-Anne Gadhia is based in Edinburgh and the savings and mortgage business is based at the Newcastle site.

Branches, Stores and Lounges

In 2011 Virgin Money opened two concept lounges as their futuristic vision of banking in Norwich and Edinburgh; during 2012 three more will open in Newcastle upon Tyne, Manchester and London. Following the purchase of Northern Rock Virgin Money acquired 75 branches, which in time will be converted into Virgin branded stores. Richard Branson has also indicated in interviews that he would like to open branches at railway stations; Virgin Group's Virgin Trains operates a number of train stations.

On 9 January the first of the Northern Rock branches was given a temporary 'Virgin' makeover, and the full rebranding process will take around 9 months.

Acquisitions

Purchase of Northern Rock plc

Main articles: Northern Rock and Nationalisation of Northern Rock

Northern Rock's headquarters in Newcastle at the time of the purchase by Virgin. The top Northern Rock sign has since been replaced with Virgin Money's logo and this will become the base of Virgin's savings and mortgage business.

On 13 October 2007, Sir Richard Branson 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 and the bank was then nationalised.

During 2011 the Government again asked suitors to come forward with proposals for Northern Rock. On 17 November 2011 it was announced that Virgin Money were going to buy Northern Rock plc for £747 million. W.L. Ross will be increasing his stake in Virgin Money, owning 44% of the combined business by putting £260 million into the deal. Both Abu Dhabi-based Stanhope Investments and Branson's Virgin Group invested £50 million in the Northern Rock deal.

There will be no further job losses, except for the ones already announced. Virgin has also pledged to keep the headquarters of the savings and mortgages business in Newcastle upon Tyne. The combined business will operate under the Virgin Money brand.

On 9 January 2012 Richard Branson visited the Gosforth site and some branches of Northern Rock around Newcastle, including one with temporary Virgin Money branding. Additional visits around the country continued the following day culminating in a projection show at Senate House, London.

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 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.

Products

Prior to the merger with Northern Rock Virgin Money offered a number of products, most of which are run in conjunction with other financial service providers. As of 2010 it offered the Virgin Credit Card (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 accounts, ISAs and pensions.

On 5 January 2012, following the merger with Northern Rock, Northern Rock plc began to provide new savings accounts under the Virgin name; Northern Rock's savings and mortgages products are still available and in time Virgin will provide additional banking products under its own brand name.

Virgin Money Giving

Virgin Money Giving's logo.

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 Marathon; 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".

Northern Rock also has its own charity, the Northern Rock Foundation, which Virgin will support until at least 2013.

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. Northern Rock also has a number of sponsorship deals. In 2011 Virgin Money sponsored events at the Edinburgh Festival.

On 4 January 2012 Virgin Money signed a 2 year deal to sponsor Newcastle United F.C. for the 2012–13 and 2013–14 seasons, a club that had a sponsorship deal with Northern Rock until the purchase by Virgin. Newcastle United's shirts will also display the Virgin Money logo for the remainder of the 2011–12 season, fulfilling Northern Rock's current deal. Northern Rock had been sponsoring Newcastle United since 2003. To coincide with the launch of Virgin Money's rebranded stores, Richard Branson appeared in Newcastle, wearing a Newcastle United shirt, with a number of Newcastle United's footballers.

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 superannuation (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.

External links

• Virgin Money Worldwide portal
• Virgin Money UK
  • Northern Rock
• Virgin Money Giving