Virgin Money to name chairman

The appointment is seen by Virgin boss Sir Richard Branson as crucial in the group's bid to challenge the established incumbents in the British banking market.

The search for a chairman with the required gravitas and experience has picked up speed in recent months. Former doyen of the banking sector Sir Brian Pitman, who fronted the bid approach by Branson for Northern Rock before it was nationalised in 2008, died in March last year. Pitman spent 50 years with Lloyds, as both chief executive and later chairman.

One source close to the bidding for the Lloyds branches, ordered to be sold by the European Commission as the price for the bank's state bailout, said: "Virgin would certainly be looking to attract someone with similar depth of experience.

"It has got the right credentials as a brand, but a strong chairman to run the board is imperative."

It is believed one name considered by Branson was former Royal Bank of Scotland chairman and chief executive Sir George Mathewson.

But it is understood that he has ruled himself out because of his other business commitments.

Antnio Horta-Osrio, Lloyds's chief executive, told the Treasury select committee last week that the bank had already sent out a brochure to potential investors for the sale of the branches, and confirmed the interest of both Virgin Money and NBNK Investments.

NBNK is the banking consolidation vehicle led by City grandee Lord Levene. Former Northern Rock boss Gary Hoffman is chief executive.

Horta-Osrio said he hoped to have serious indicative bids by the end of July.