Newspaper article The Evening Standard (London, England)

A Hard Rock for Branson to Climb

Newspaper article The Evening Standard (London, England)

A Hard Rock for Branson to Climb

Article excerpt

Byline: James Ashton City Editor

[bar] O Sir Richard Branson may finally be about to get his hands on Northern Rock. It has been a long time coming. The bearded entrepreneur - or at least the people he has running his financial services arm -- has had to wait four years to get this close again.

Virgin tried to buy the asset in 2007, when the Treasury opted instead to nationalise the ailing Rock. This time around Branson is virtually last man standing, with expectations of a bid by Wednesday's deadline from his main rival, the American private equity firm JC Flowers, melting away.

NBNK, a new banking venture chaired by former Lloyd's of London chairman Lord Levene, is also expected to bid, but has limited appetite.

If this auction epitomises the brave new world of high street banking, we can only hope things hot up when the debutants finally start offering current accounts. Injecting more competition into the sector has become something of a cause celebre for the government but interested parties are hardly rallying around.

The eurozone drama doesn't help. When George Osborne fired the starting gun on the Northern Rock sale in a Mansion House speech in June, he hoped a deal would mark the "beginning of the end" of the financial crisis. Some hope. Four months on, perhaps he should rethink the whole process if the taxpayer is to get its money back.

Lloyds' auction of a portion of its branches and customer accounts is similarly slow-going, with only NBNK bidding, and at no more than half the business's book value. In frustration, chief executive Antonio Horta-Osorio is preparing an alternative plan to spin them off on to the stock market.

There were hopes that by piecing together these odds and sods that someone could create a "fifth force" in banking that wouldn't rip off the consumer so much. …

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