SIR Richard Branson has signalled his intention to turn Virgin into a high street bank within the next two years.
The entrepreneur said that the lack of trust in consumer banks meant his financial services operation, Virgin Money, would be able to build up its market share quickly.
He said: “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.”
Virgin is reportedly lobbying the government to break up Royal Bank of Scotland, which is majority-owned by the state, to increase competition in the sector. Should parts of the bank be offered for sale, Virgin could establish itself on the high street through this route, according to reports.
Sir Richard led a bid by Virgin for the now nationalised bank Northern Rock, but failed to convince the Treasury that it could provide the best option for taxpayers.
A rescue of Northern Rock would have been transformational for Virgin Money, giving it a key foothold in the mortgage market and an entry into savings. If Virgin is not able to buy up any existing banking businesses, it could build a network of branches by exploiting the falling price of leases on the high street, as recession-hit retailers close outlets or shut up shop entirely.
The division started life as Virgin Direct in 1995.