Terry Murden: Phoney war could be over as Branson gears up

AFTER the long phoney war, we now seem to have a serious bidder ready to put his money on the table for the bits of Lloyds Banking Group that it is being forced to sell.

Sir Richard Branson says he's ready to table an offer in July and that he's close to raising 3 billion from UK and US investors to help make it possible.

The bid would come from his Virgin Money business which acquired a banking licence at the turn of last year via its 50 million acquisition of Church House Trust, a west of England-based private bank founded in the early 1970s by a family of solicitors.

Much of that payment was in providing his new bank with capital to get things started. Now he needs some means of getting access to customers and as Church House had no branch network, he's looking at Lloyds to provide them.

Virgin Money had already announced that it would be basing its operations in Edinburgh and has been hiring staff in preparation for a full assault on the banking market.

The donkey work has been done in terms of establishing the brand and while still a relatively minor player in the sector it has more than 2.5 million customers and offers a range of financial services. These include credit and pre-paid cards, savings, individual savings accounts, insurance and life assurance products. At present it lends its brand to financial services products provided by other lenders, including Royal Bank of Scotland and the Co-operative Bank.

Branson is now being talked of as front-runner for a 600-strong branch network being offloaded by Lloyds. As the buyer will take all 185 Lloyds TSB branches in Scotland it will signal a big change on Scottish high streets.

There are concerns among Lloyds staff that the buyer, whether Branson or someone else, will not want all 600 (which includes branches of Cheltenham & Gloucester), particularly in an age when banks are keen to push their customers towards the internet. However, senior Lloyds staff have admitted that even if the branches stayed with the group it would almost certainly have been forced to trim a few as it is top heavy with branches following the merger with Bank of Scotland.

A sale will not be complete until the end of 2013 but Lloyds boss Antonio Horta-Osoroio wants the preferred bidder in place by the end of this year so he can concentrate on the businesses that will remain under his control.

Hundreds of Lloyds staff were briefed on the proposed switch at a meeting yesterday in London, including what they should tell puzzled customers. The missing piece of information, of course, was who will be in charge.

Branson will certainly pitch for the branches which is also likely to prompt bids from Clydesdale-owner National Australia Bank and Lord Levene's NBNK, among others. The Virgin boss has failed in his previous attempts to acquire Northern Rock and the RBS branches so he'll need a robust business plan if he's to succeed this time.Jaguar Land Rover, the sparkling star of Tata

AFTER all the troubles heaped on the British motor industry in recent years there was some better news yesterday with the announcement that Jaguar Land Rover was back in profit. The improved performance has been so swift that it took some analysts by surprise.

The sale of iconic brands to overseas buyers has never been popular, but the turnaround at Jaguar by its Indian owner Tata has been remarkable, if brutal. Sales have risen sharply on the back of new models, but also via aggressive cost-cutting including wage freezes and salary cuts for new staff.

Tata had planned to shut one of its West Midlands factories over the next ten years, outsource production overseas and close its final salary pension scheme to new members.

But management last year performed a U-turn and said that all three plants in the region and in Halewood on Merseyside would stay open and that more money would be invested.

All we need now is for the government to answer the call to revive the struggling machine tools sector that once thrived throughout the country.