The boards of Church House Trust and Virgin Money have reached agreement on the terms of a unanimously recommended offer to be made by Virgin Money to acquire the entire issued and to be issued share capital of Church House Trust.

Virgin Money’s application to become the controlling shareholder of a bank, namely Church House Trust, has already been approved by the FSA.

Church House Trust is a regional bank offering deposits and mortgages. It does not rely on wholesale markets for funding, has no borrowing from other banks and its retail deposits are more than double its loan book.

The acquisition of Church House Trust will provide the platform 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.

Research conducted by Virgin Money over the past two years has shown consistently that there is a clear consumer demand for Virgin Money to enter the banking market. The research indicates that Virgin Money would be both a trusted deposit taker and mortgage lender.

Sir Richard Branson, founder of the Virgin group, said: “The Church House Trust business offers us a strong platform for growth. Virgin Money aims to bring simplicity to the UK banking market which has traditionally been a complex sector.””