Virgin Money’s first product launch in Australia – of a co-branded
credit card issued by Westpac – was a mixed success. The financial
services brand of Britain’s publicity hungry Virgin group attracted a
mountain of free publicity and so many low quality applications that
relations quickly soured with Westpac. One consequence was that, three
years later, Westpac passed on the opportunity to fund the mortgage
product launched into the Australian market yesterday by Virgin.

Virgin’s second product launch in Australia – of a low-fee
superannuation account supplied and managed by Macquarie Bank back in
July 2005 – bombed. Whether super was a financial services product
likely to spark any mass interest is debatable. The lacklustre demand
for Virgin Super (according to rumour) certainly appears to have
created tensions between the local managing director, the managers of
Virgin’s capital and brand back in Britain, and with Virgin Money’s new
minority investor in Australia, Macquarie Bank.

Virgin’s founder, Richard Branson, provided a partial explanation for
the departure of Virgin Money’s local managing director Rohan Gamble.
Virgin announced Gamble’s resignation last week, though the Financial Review reported his unplanned departure two weeks ago. In an interview with the Herald Sun,
Branson said that Gamble “has been spectacular on credit cards (but)
the feedback that I got in England was that the company needed a
different sort of animal as we moved to get bigger (in Australia).”

“So I think (Mr Gamble’s) a brilliant entrepreneur … (but) we also
had new shareholders that came in (Macquarie Bank) and … the
question was … who was the right person to run it and it was felt
that he’d done a brilliant job, but that we needed a different kind of
person for the next stage.” Branson told Dow Jones
that “I think we will always keep control (of Virgin Money in
Australia) but we certainly wouldn’t be unhappy for them (Macquarie
Bank) to take a slightly bigger stake.”

Macquarie bought a 10% stake in Virgin Money Australia in
November. Branson also talked up Virgin Money’s prospects. “We will be
offering a broader range of products than most banks within three
years, at much, much better prices,” he told Dow Jones.