Virgin Money Still Interested in Buying RBS – Good!

Filed Under Finance

It seems that Virgin Money is still interested in buying Royal Bank of Scotland retail banking arm. If they succeed then that would be good for consumers. Here’s why.

RBS was bailed out by the government during the credit crunch and so is mostly owned by taxpayers. It is still being funded by emergency funding from the Bank of England so an early sale would stop this drain on national funds and could even return a profit for the government.

The retail arm of RBS owns 320 high street branches, which includes the Natwest branch network, so it has a major presence on the high streets throughout the UK. Estimates place its value at around £2billion, so that is a sizeable chunk of money to be returned to the Treasury when it is sold.

Why would it be good for us if Virgin Money bought RBS, I hear you ask.

In a nutshell, I believe that if Virgin acquired such a strong banking presence in our towns, it would shake up retail banking, making it more customer focussed and definitely more competitive. We would all benefit, in my opinion.

You see, the Virgin brand has grown so big through its ability to understand it’s customers, challenge established business practices and then deliver what the customer really wants at a price they can afford.

Where Freddie Laker failed with his transatlantic airline, Richard Branson succeeded with Virgin Atlantic. Virgin Mobile is now a major player in the phone market. Look at what Virgin Media is doing to the broadband and digital TV markets.

Having that ability to deliver customer focussed and competitive banking products can only be good for us all, particularly as banks are still reluctant to loan money and are stifling economic recovery.

There is another reason, too, why Virgin Money is so keen to buy a major high street bank. Tesco want to become a bank as well.

Tesco are another very customer focussed company that excel in delivering products that consumers want, and kind on their pockets. We are soon to see an epic battle in the banking sector as Virgin and Tesco go head to head for our banking business.

We will all benefit as competition for our savings, mortgages and loans business intensifies.