Hot on the heels of high-street grocer Tesco comes another well known brand determined to attract disgruntled customers from the shamed banks.

Media reports claim that Virgin Money, which was originally launched in 1995, is set to ask the Financial Services Authority for a full banking licence. This would allow it to offer mortgages and take deposits, which is one step up from its current product package of insurance, credit cards, loans and saving schemes.

With its two million plus customers, Virgin Money is the financial services division of Richard Branson’s Virgin empire.

Virgin Money’s last results showed that in 2008 sales increased from £70 million to some £100 million, with profits at around £30 million.

Virgin Money is following in the footsteps of retailing giant Tesco which has already committed over a £1 billion to establish a major banking prescence through the U.K. And there are sure to be more joining the hunt for customers who blame the high street banks for much of the world global downturn.

Tesco Personal Finance has already taken complete control of the joint venture it shared with the RBS Bank and has set out its stall with plans to open 30 in-store financial outlets throughout 2009.

Boots is rumoured to be another retailer that is about to take the plunge into banking proper (in other words, offering accounts and mortgages). Most of the U.K.’s big retailers already offer an array of personal finance products.

Virgin Money was formerly mooted as a buyer of the troubled bank Northern Rock and that remains one of three options for Branson. He could also choose to create a completely new bank with a high-street and internet prescence, or get together with an existing financial institution.

Virgin Money is said to be in talks with a U.S. investment bank about funding options.

Guest Article by Neil Camp

High-street chemist and retailer Boots might be taking a leaf out of Tesco’s book and be considering expansion into personal finance.

Boots has 2,600 U.K. retail outlets and a very credible brand, so the temptation to offer its customers an alternative to the much maligned banks must be great. It is thought to be one of many ideas that Boots is considering in a drive to boost sales.

Tesco has already announced firm plans to offer banking outlets in 30 of its stores, and increase its loan and insurance business. It may then offer current accounts and even mortgages over the coming years.

Industry experts say that if the privately owned Boots Group were to move into banking in any significant way, it will likely look for existing finance sector partners.

Retail observers think the traditional dominance of the big banks over the U.K. personal finance market is to end as more and more brands, using their prescence and reputation, offer their customers a viable alternative. This exploits the blame attached to the banking sector for the recent financial crisis.

Guest Article by Neil Camp