Virgin Money step closer to building UK retail bank-papers

Virgin Money says it now has a means of developing a UK retail banking business after buying regional bank Church House Trust.

Virgin will pay £12.3m for the bank and invest £37.3m into the business, according to the BBC.

Under the Virgin Money brand, the company will use the bank to offer savings and mortgages products.

"The Church House Trust business offers us a strong platform for growth," said Virgin group founder Sir Richard Branson.

Virgin Money has more than 2.5 million customers and offers a range of financial services including credit and pre-paid cards, savings, individual savings accounts, insurance and life assurance products.

Church House, which does not operate a branch network, has about 3,000 private customers and £50m in deposits, the BBC reports.

Virgin Money has been looking for a way into the UK retail banking sector for a while after failing two years ago in its bid to buy Northern Rock.

The FSA granted Virgin Money a form of banking licence on 23 December which comes into operation once Virgin creates a change of control at an existing bank.

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AIG told to keep quiet about $105bn paid to banks

Tim Geithner's Federal Reserve Bank of New York urged AIG to remain silent on $105bn (£65bn) of payments made to banks including Goldman Sachs and Deutsche Bank at the height of the financial crisis, The Telegraph reports.

The New York Fed, under Mr Geithner's leadership until he was appointed US Treasury Secretary in January 2009, instructed the troubled insurer to withhold details of the payments from the American public. They had already bailed out AIG by as much as $182bn at the height of the crisis.

According to a series of emails obtained and made public by Congressman Darrell Issa, AIG had planned to inform investors in a regulatory filing published on December 24, 2008, that it had paid counter-party banks owed money at a rate of 100 cents on the dollar. The banks were owed the money for credit-default swaps they had entered into, mainly on behalf of clients.

However, according to the emails, an official from the NY Fed crossed out the reference ahead of publication, and there was no mention of the payments, which came to light five months later, in the filing. For full story click here

Lloyds faces £200m loss as property company fails

Lloyds Banking Group is facing a loss of at least £200m after Kilmartin, an HBOS-backed property company, went into receivership, The Times reports.

Directors of Kilmartin Holdings handed over the company to PricewaterhouseCoopers yesterday, along with Kilmartin Property Group. Annfield Assets, another subsidiary, has gone into administration.

HBOS pumped about £500m of loans into the company during the property boom. The portfolio of sites is worth about £300m, leaving the bank facing a £200m hit on the loans if the assets are sold.

It also has an equity stake in the company, which was worth 50% in 2008.

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