Virgin Money chief executive Jayne-Anne Gadhia believes competition would be safeguarded if there were a public interest test applied to lenders wanting to acquire competitors.
Giving evidence to the Treasury select committee last week as part of its inquiry into competition and choice in the banking sector, Gadhia said acquisitions should be scrutinised. She said: “If we are serious about competition and using acquisition opportunities to enhance competition, we should be applying a public interest test to make sure those acquisitions actually are good for competition.”
Gadhia also said it is important the boards of Government-backed banks should consider the effects the sale of any part of their businesses would have on competition in the market.
She said her ambition is to make Virgin Money a top six bank in the UK and it plans to open 70 branches over the next five years.
She said: “As Government assets are sold, we think it is important that the boards of the companies selling them are not looking solely at the economic benefits of that transaction but are also appropriately mindful of, predominantly, the competition effect.”
London & Country head of communications David Hollingworth says: “I think everyone would be backing that kind of proposal. What we have seen in the market is so much consolidation that you have got some gigantic lenders now that will dominate, or potentially dominate, the market for years to come. So the more competition is brought to the market, the better it will be for consumers.”