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WL Ross & Co makes strategic investment in Virgin Money

Virgin Money Holdings (UK) Limited (“Virgin Money”) is pleased to announce today that it has reached agreement on a strategic investment from WL Ross & Co. LLC (“WL Ross”).

Under the terms agreed, WL Ross will commit £100m of new capital to Virgin Money and will become a 21% shareholder in the Company. James Lockhart, Vice Chairman of WL Ross, will also join the Virgin Money Board. The transaction and Board appointments remain subject to FSA approval.

The strategic investment from WL Ross will provide new capital to allow Virgin Money to accelerate the expansion of its full-service retail bank and the creation of a branch network. It also provides WL Ross with the option for further investment should an appropriate acquisition opportunity present itself.

The investment follows Virgin Money's recent acquisition of Church House Trust, which provided the platform and banking license from which Virgin Money will develop a retail banking business in the UK – offering a full range of products to consumers under the Virgin Money brand.

Sir Richard Branson, Founder of the Virgin Group, said: “I am delighted that WL Ross has decided to invest and partner in our vision for a new way of banking. Our ambition is to make everyone better off through good value and transparent products backed by a great customer experience”.

Wilbur L. Ross, Jr., Chairman of WL Ross said: “We are impressed with Virgin Money's well deserved reputation with UK customers and with its growth strategy. We look forward to supplying substantial additional capital to support Virgin's acquisition program.”

Jayne-Anne Gadhia, Chief Executive of Virgin Money, said: “The investment from WL Ross is a significant endorsement of our banking plans and will help Virgin Money build a real banking alternative for consumers in the UK market. Virgin Money will provide an improved and differentiated form of banking to its customers, based on the core principles of fairness, simplicity and value that are synonymous with the Virgin brand. This will provide customers with real choice in an industry that has become highly consolidated in recent years”.

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Notes to Editors:-

About Virgin Money:

  • Virgin Money is Virgin’s banking arm and was established in 1995 as a joint venture between the Virgin Group and Norwich Union.
  • In 1997, Virgin Direct Personal Financial Services Limited launched The Virgin One Account, a joint venture with The Royal Bank of Scotland that offered the UK’s first current account mortgage direct to the retail market. In 2001, RBS bought out the Virgin Group’s stake in the joint venture.
  • In April 2004 the Virgin Group took 100% ownership of Virgin Money.
  • In January 2010, Virgin Money acquired Church House Trust plc, a small private bank, to provide the platform for Virgin Money to offer retail banking services in the UK.
  • Virgin Money currently has over 2.5 million customers and offers Payment Cards (Credit Cards & Prepaid Cards), Savings and Investment products (Stakeholder Pensions, Children’s Pensions, Employers Pensions, FTSE Tracker ISA, Bond & Gilt ISA, Climate Change ISA, Cash ISA, and Unit Trusts), General Insurance products (Motor, Home, Travel, and Pet) and Life Assurance products to the UK market.
  • Virgin Money’s brand ambition is to make “everyone better off” – this philosophy underpins our approach to business by offering good value to customers, treating employees well, making a positive contribution to society and delivering a profit to shareholders.
  • Virgin has signed a five-year deal to be the official sponsor of the London Marathon, the biggest annual fundraising event in the world. The inaugural Virgin London Marathon is on 25 April 2010. Virgin Money is leading the London Marathon sponsorship with the ambition to help runners raise £¼ billion over 5 years and will use its infrastructure, online capability and financial expertise to deliver that through Virgin Money Giving.

About WL Ross & Co LLC

  • WL Ross & Co. LLC, founded by Wilbur L. Ross, Jr., based in New York City, has sponsored more than $8 billion of equity-linked investments since its inception in 2000.
  • Many of WL Ross investments have been in the financial and industrial sector, including the bank, mortgage servicing, insurance, railcar leasing, steel, automotive and coal space.
  • Prior to joining WL Ross, James B. Lockhart III was the Director of the Federal Housing Finance Agency, regulator of Fannie Mae, Freddie Mac and the twelve Federal Home Loan Banks and its predecessor agency since May 2006. He served as the Chairman of Federal Housing Finance Oversight Board and a member of the Financial Stability Oversight Board. Prior to that Mr. Lockhart was the Deputy Commissioner and Chief Operating Officer of Social Security, Secretary to Board of Trustees and a member of the President Bush’s Management Council. Mr. Lockhart also served in the previous Bush Administration as Executive Director of the Pension Benefit Guaranty Corporation. Mr. Lockhart graduated from Yale University with a BA and received an MBA from Harvard Business School. He served as a Lieutenant (j.g.) in the U.S. Navy aboard a nuclear submarine.
  • WL Ross was part of the Virgin-led consortium to re-finance and re-capitalise Northern Rock Plc in 2007/8.