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By: Jessica Darnbrough
Richard Branson and his company Virgin Money have once again vowed to take on the majors, after launching a range of banking products and flagging plans to re-enter the mortgage market.
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The launch in Sydney yesterday marks the second attempt Virgin Money has tried to crack the Australian financial services sector.
Seven years ago, Mr Branson came to Australia promising to strip mortgage market share from the majors.
However, not everything went to plan.
Westpac turned its back on the Virgin Money credit card business and Macquarie walked away from its home lending business.
In 2008, Virgin Money reported a $19.5 million loss – it its third consecutive year of losses.
At the time, Virgin Money’s chief executive officer told The Adviser that the loss was aligned with expectations.
“In line with Virgin Money’s strategic plan we expected to be in a loss making position for the year, having only recently launched the mortgage product,” he said.
Speaking to journalists at the launch yesterday, Mr Branson said he remains optimistic about Virgin’s future in Australia this time around, namely because of the funding the company is receiving from Citibank.
Last September, The Adviser reported that Citibank had formed a strategic alliance with Virgin Money in a bid to re-introduce competition into the market.
While the specifics around Virgin’s mortgage products remains under wraps, Mr Branson said Virgin’s main aim was to inject competition back into the Australian mortgage market.
''We've come to Australia to give the banks a run for their money,'' Sir Richard enthused. ''There used to be nine banks, a lot of competition here. Those nine banks have largely disappeared, and now we've got four big banks, which means there isn't a lot of competition … and those banks are making a lot of money.''
