Virgin Bank

PROLIANT

BarclaysManager wrote: »

How fast do you think it is to set up a bank exactly?

Unless they're going to run it off borrowed mobile phones and an Excel spreadsheet, you wouldn't hear anything this fast anyway.

...or maybe a recycled VMS Main-Frame?

Extant

PROLIANT wrote: »

...or maybe a recycled VMS Main-Frame?

They actually look quite cool, with the 1970s design and all. Working in Virgin Bank would be like being in Captain Scarlet.

Inactive

Not so sure I would trust any Branson owned company with my money, he doesn't have a very good track record with train time keeping, his broadband/phone company ( formerly NTL ) has a poor service culture and he was also involved with BA in a cartel with his airline, which was not in the customers favour.

noh

BarclaysManager wrote: »

How fast do you think it is to set up a bank exactly?

Unless they're going to run it off borrowed mobile phones and an Excel spreadsheet, you wouldn't hear anything this fast anyway.

I have no idea how long it takes to start up a bank.
If you care to read the article you will see it was entitled "Virgin plans high-street bank 'within a year' "
The article was published more than a year ago.

Edit:-
Looks like the idea is still alive but the timescale is now quoted as within two years (of March 2009)
http://www.dailyrecord.co.uk/news/business-news/2009/03/10/virgin-bank-plan-could-involve-take-over-of-rbs-branches-86908-21186102/
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5870942.ece

Nigel

opinions4u

While I have no idea what action Branson has taken to pursue this plan, the last year has quite clearly NOT been the time to set up a bank. A point that wasn't obvious last March, but is with events that have happened since.

Obtaining funding wholesale is a complete non starter, while obtaining it retail (savings and current account balances) has seen average rates for "attraction" products move from BofE - 1% to BofE + 2%.

So raising the money has become expensive at exactly the time the risks as you lend it on have become too high.

If he does go ahead with his plan it will be at a time when the economy is good. This will allow him to attract the funding he needs at an affordable price and to lend it on without significant risks of default.

As for a branch network? I suspect opportunities will arise over the next couple of years as Lloyds review the existence of Cheltenham & Gloucester, other building societies reduce coverage to remain competitive and decisions come to a head about the Halifax and Lloyds brands on the high street.

That said, simply opening branches doesn't make the money flood in. You need to offer loss making savers rates to achieve that, or strike a deal with wholesale funders.

The former will only lend to new providers at a price, the latter won't lend at all.

Branson could acquire the infrastructure to set up his own branch network. I struggle to see where he'll raise the money to lend.

Which brings us on to 'white labeling' of products provided by an established bank. Like he already does with his credit card operation. Again though, there is barely margin in it for existing providers, let alone sharing some of the loot with Branson.

Then training a sales force and complying with somewhat onerous FSA rules?

The more he looks at this, the more he will look elsewhere to maintain his fortune.

ShelfStacker_3

BarclaysManager wrote: »

Unless they're going to run it off borrowed mobile phones and an Excel spreadsheet, you wouldn't hear anything this fast anyway.

Yeah, to get to that stage took Alliance and Leicester at least a decade.