News just in that Virgin Money has bought Northern Rock for £750 million. This means that Richard Branson is now a high street banking tycoon. Virgin Money have only bought the “good bank”, the government will keep the bad debts / “bad bank”.
George Osbourne said that the deal will be a good thing for British tax payers and families as it will provide renewed competition.
The headquarters for Virgin Money is also in Newcastle which will ensure that many if not all jobs will remain in Newcastle, certainly good news for employees and families.
At a time when some European banks could be at risk of nationalisation a British bank is being returned to the private sector.
The Government have still made a significant loss on this deal, having paid over £4 billion for the bank to save client investments.
Virgin Money currently specialise in home insurance, credit cards, pre-paid travel money cards, pensions, insurance and savings. This is certainly an exciting move for Virgin.
George Osbourne and the coalition government may have made a huge loss on the deal but it is thought that this is the best deal possible for the tax payer.
Northern Rock customers will be able to maintain their accounts, the rebranding of Northern Rock to Virgin Money will start in January 2012.