By Philip Aldrick, Banking Editor Published: 7:38PM BST 23 Oct 2009  Sir Richard Branson at the launch Virgin Money's not-for-profit online fund-raising service, earlier this month Photo: PA/CARL COURT  Virgin Money, which in 2007 made an aborted bid for Northern Rock, submitted its application with the Financial Services Authority a fortnight ago. The process can take six months but, once it has a licence, Virgin plans to start an online bank through which it will take deposits and offer mortgages.  Its strategy is to develop a successful internet presence and then begin building a branch network. The company, which already offers credit cards, savings and investments, will look at acquisitions as part of that process and has been linked with a second bid for Northern Rock. Jayne-Anne Gadhia, Virgin Money's chief executive, has said in the past that she would consider any opportunities that came up for sale.  A deal would probably be done as part of a consortium, with private equity and investors such as Wilbur Ross, the US buy-out specialist, likely to be on board. Mr Ross was part of Virgin's consortium bid for Northern Rock.  The company is in talks with Bryan Sanderson, who was briefly chairman of Northern Rock its nationalisation in February last year, to become a non-executive director. It is also in discussions with Norman McLuskie, chairman of Royal Bank of Scotland's retail direct division until 2005, about him joining the non-executive board.  Virgin Money, which has about 200 staff, is believed to be the most likely buyer of the so-called "good bank" being spun out of Northern Rock.  The nationalised lender is planning to split into a good bank with £20bn of good assets, and a "bad bank" with £60bn-£80bn of bad loans. The European Commission is expected next week to clear the proposal on the condition that Northern Rock agrees to tight restrictions on market share and pricing.
Britain's banks could find themselves facing an aggressive new competitor    after it emerged that Virgin Money, the consumer credit arm of Sir Richard    Branson's business empire, has applied for a full banking licence.