Wilbur Ross Invests in Virgin Money, Seeks UK Banking Market Expansion

Strategic Insights -

Virgin Money, a financial services group led by Sir Richard Branson, has secured a major investment from US turnaround specialist Wilbur Ross. The deal sees Ross acquiring a 21% stake in Virgin Money for £100 million, with plans to invest "hundreds of millions" more in acquisitions. This move comes as Virgin Money prepares to bid for 318 Royal Bank of Scotland branches, a significant move to expand its presence in the UK banking market.

As a seasoned turnaround specialist, Ross has a reputation for buying struggling firms and selling them at a profit. His investment in Virgin Money is expected to bring much-needed clout to the group's bid for RBS assets. Ross's involvement has also attracted interest from other investors, with Virgin Money in talks with private equity firms about a potential cash injection.

Despite the success of its recent acquisition of Church House Trust, Virgin Money aims to open 70 high street branches by 2015, with assets exceeding £10 billion. With Ross's backing, the group is likely to be more aggressive in its pursuit of banking assets in the UK market, including the sale of Lloyds Banking Group's high street branches and the "good bank" element of Northern Rock.

Key Takeaways:

  • Wilbur Ross has invested £100 million in Virgin Money for a 21% stake, with plans to invest "hundreds of millions" more in acquisitions.
  • The investment will support Virgin Money's bid for 318 Royal Bank of Scotland branches, a significant expansion into the UK banking market.
  • Ross will sit on Virgin Money's board and has expressed interest in backing the company's previous bid for Northern Rock in 2007.
  • Virgin Money plans to open 70 high street branches by 2015, with assets exceeding £10 billion.
  • The group is in talks with private equity firms about a potential cash injection.
  • Ross has a reputation for buying up firms on life support and selling them for a profit, having previously acquired LTV and sold it for $4.5 billion.

Statistics:

  • 21% stake in Virgin Money acquired by Wilbur Ross for £100 million.
  • £100 million investment with plans to invest "hundreds of millions" more in acquisitions.
  • 318 Royal Bank of Scotland branches up for bid, with Virgin Money planning a significant expansion.
  • 70 high street branches planned to be opened by Virgin Money by 2015.
  • Assets exceeding £10 billion expected by Virgin Money by 2015.

Sources:

  • Euclid Infotech Pvt. Ltd.
  • WL Ross & Co
  • Arcelor Mittal
  • Bill Clinton (former US president)
  • Lloyds Banking Group
  • Northern Rock