Brokers say it not clear if they will benefit from Virgin Money’s entry into the banking sector.
Last week, Virgin revealed it had reached an agreement to buy Yeovil-based Church House Trust for £12.3m which it will use as a platform for a retail banking launch. The deal brings Virgin 3,000 customers and a UK banking licence which allows it to offer mortgages and deposits.
Virgin has yet to confirm whether it will be offering mortgages through intermediaries. John Charcol senior technical manager Ray Boulger says:
“I think until we know what the proposition is, it is going to be quite hard to say whether they will use brokers.”
He says if Virgin goes on to buy Northern Rock, it would be bound to use brokers as so much of Rock’s business is generated through intermediaries but if Virgin went on to acquire Royal Bank of Scotland branches, it would not necessarily need brokers.
Alexander Hall chief operations officer Andy Pratt says Virgin’s entry will boost competition and its “plain, straight talking” approach could allow it to capitalise on the damaged reputation of UK banks.