Sir Richard Branson’s Virgin Money has aspirations to offer retail banking in South Africa, the company said on Wednesday following the launch of a life insurance offering.
In South Africa, Virgin Money offers a credit card through a partnership with ABSA, and through Dial Direct it has offered short-term insurance.
On Wednesday it launched a direct life insurance offering with 1Life Insurance.
“We are looking to launch banking products and there are ways in which we are going to do that,” Vinay Padayachee, the MD of Virgin Money South Africa, said in a briefing attended by Mr Branson in Johannesburg on Wednesday. “Our aspiration is to look at banking in some way in the future.”
Mr Branson said Virgin Money was making inroads in banking following its takeover of Church House Trust in 2010 and the previously nationalised bank, Northern Rock, last year. He said in the past 12 months, Northern Rock had acquired 1.2-million customers and was writing one-third of new mortgages in the UK. Mr Branson said it would be great if Virgin Money could add banking into the suite of solutions in South Africa. In 2006, Virgin Money launched a credit card in South Africa.
Mr Padayachee said the company initially grappled with impairments but the business was now profitable. He said the Virgin Money credit card had issued credit of more than R1bn and had more than 100,000 active customers.
As far as the life insurance product launch was concerned, Leon Vermaak, the CEO of Telesure, which owns 1Life Insurance, Dial Direct and Auto & General, said the fact that Virgin had partnered with them was a sign that his company had done well in the short-term insurance offering with Virgin Money. Mr Vermaak said he believed the Virgin Money short-term insurance business could grow to represent 5% of the total personal lines market in South Africa.
Mr Padayachee said that in October Virgin Money would look at offering insurance for small and medium enterprises.
Earlier on Wednesday Mr Branson visited the construction site of Virgin Active’s Classic health club in Sandton, scheduled to open in August. The development has cost the company about R150m.