Virgin Money tipped for Lloyds bid

The online bank, part of Sir Richard Branson’s Virgin empire, has already expressed an interest in buying state-owned Northern Rock, but with funding now in place to back a larger deal it is also poised to enter a second round bid for the Lloyds branches, the Sunday Telegraph reported.

Virgin’s new backers include the Abu Dhabi Investment Authority, private equity group Carlyle, General Atlantic and the Universities Superannuation Scheme, all of which will take a minority stake in the online bank if it is successful in acquiring either Northern Rock or the Lloyds branches, or both.

Lloyds, which is being forced to sell the branches due to a European Union ruling over state aid, received only three formal bids in the first round of the sale process.

A Virgin Money spokesman said yesterday: “Northern Rock remains our primary focus.”