Virgin Group Founder Looks to Set Up Bank in 2010

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MILAN -(Dow Jones)- Virgin Group founder Richard Branson Monday confirmed the group's intention to launch a new bank - Virgin Bank - in the new year, adding that Virgin Money is looking at the assets of three U.K.-based banks.

"We will be setting up the new bank in the new year, in Jan, Feb" Branson said. "We may also buy some assets of the nationalized banks," he added.

Last week Virgin Money, a unit of the group, said it has submitted its application with the U.K.'s Financial Services Authority to open a bank.

Branson welcomed comments last weekend by the U.K. government that it wanted to see more banks in the country. "I think that U.K.-based consumers would welcome the opening of a new bank," Branson said. According to Sky News, Virgin Money is in talks with Bank of America Corp. (BAC) to fund a possible move into high-street banking in the U.K.

According to press reports, Virgin Money is looking at bidding for Northern Rock assets.

Branson didn't comment when asked about a direct interest in Northern Rock.

Royal Bank of Scotland Group PLC (RBS) and Lloyds Banking Group PLC (LYG) are expected to announce business divestments as early as Tuesday, in a move to fulfill requirements by the European Union after being bailed out by the U.K. government last year.

When asked about the possibility of continuing the sponsorship of Formula 1 team Brawn, Branson said an announcement will be done in a month's time. "A decision will be announced in four weeks," Branson said adding that he welcomed the introduction of a cap on spending. "Less money could lead to more innovation and more teams."

-By Sabrina Cohen, Dow Jones Newswires, +39 02 5821 9906; sabrina.cohen@dowjones.com

(END) Dow Jones Newswires

11-02-09 0847ET