Simon Read: At last we will have credible challengers to the greedy banks
So Virgin Money is finally set to launch its challenge to the high street banks after snapping up Northern Rock for £747m on Thursday. The deal won't actually go through until 1 January 2012 and then there will be a six- to nine-month process of rebranding the 70 or so branches that Northern Rock has.
But that means that the name of the former building society and collapsed bank will disappear from our high streets. Is that a reason to weep? Of course not. The name is synonymous with the credit crunch and global banking collapse. As such it's become a devalued and disgraced brand.
So what about the upstart that will replace it? Interestingly the Virgin brand is actually almost as old as the Northern Rock name. The building society was only created in 1965, from a merger between the Northern Counties Permanent Building Society and the Rock Building Society. (Admittedly, both of them had proud histories, which stretched back a century or more.)
Richard Branson created his Virgin brand only five years later when he opened a small Virgin Records and Tapes shop in Notting Hill. So Virgin has almost as much tradition behind it as Northern Rock. But, crucially, it hasn't been tainted by the financial scandal.
It means Virgin Money has the opportunity to offer a credible alterative to the traditional banks. To do so it needs to offer competitive products and decent service. It needs to build on the values that Branson has stood for over the past four decades but add a layer of additional trust that the big five banks have lost.
With only 75 branches in total and many of them in the north, the new outfit won't be able to compete in terms of branch banking. But when I chatted to senior officials at Virgin Money this week, they seemed confident that their future network of branches – albeit much smaller than any of the big five – will be enough to launch a credible alternative.
I hope that Virgin Money is up for the challenge. As customers we need a fresh banking alternative on the high street. To date our best hope for that has been the likes of the Co-operative Bank or the little London-based Metro Bank.
The former is still waiting anxiously to hear the outcome of its bid for the 600 or so branches that Lloyds Banking Group is being forced to sell off. News of that may not emerge until the New Year, but if the Co-op is successful, it could end up with almost 1,000 branches. That's more than enough to be seen as a major rival to the other banks.
Metro, meanwhile, has some great ideas behind the hoopla and hype of its balloons and dog bowls. Not least is the fact that you can walk into any of its branches and have a new debit card printed and made for you there and then. For those of us used to having to wait a week or more for our bank to send out new plastic, being able to walk into a branch and walk out with a new card minutes later is a great bit of customer service.
But Metro has only nine branches. And they're all in London. It also, as yet, has no online presence and has, reportedly, only provided 100 mortgages to customers since being launched some 15 months ago. That all adds up to an interesting sideshow so far rather than a real alternative.
So our hopes – for now – lie with Virgin. Jayne-Anne Gadhia, Virgin Money's chief executive, set out a promising statement of intent this week, saying: "We are aiming to build a true banking alternative for the UK consumer, one centred around our ambition to make everyone better off."
If they succeed in shaking up the banking market we all will be better off. If the Co-operative is successful in its bid for the Lloyds' branches as well, then, by next summer, we could have two serious challengers to the big five banks. For the sake of future generations of banking customers, I hope that Virgin Money and the Co-op both prove a success.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
- 1 Al Pacino on suffering from depression: 'It can last and it's terrifying'
- 2 Half of young women unable to ‘locate vagina’ and 65% find it difficult to say the word
- 3 Saudis risk new Muslim division with proposal to move Mohamed’s tomb
- 4 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
- 5 Mexican woman becomes world’s 'oldest person' at 127
Rotherham child sex abuse scandal: Labour Home Office to be probed over what Tony Blair's government knew - and when
What do immigrants really think of Britain? Polish immigrant's Reddit post goes viral
Ashya King: Parents of five-year-old boy refused permission to visit him in hospital and denied bail at Spanish court
With Douglas Carswell joining Ukip, my party has taken another giant step forward
When elitism grips the top of British society to this extent, there is only one answer: abolish private schools
Ashya King: 'Cruel NHS has not given us the treatment we need', says father of five-year-old with brain tumour who fled to Spain
iJobs Money & Business
£600 - £800 per day: Harrington Starr: Power & Gas Business Analyst/Subject Ma...
£600 - £900 per day: Harrington Starr: Infrastructure Lead, (Trading infrastru...
£35000 - £38000 per annum + benefits: Ashdown Group: A highly successful, glob...
£60000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Business Anal...
Day In a Page
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony