Never one to give up easily, the boss of Virgin Money wants her bank's brand everywhere – starting with buying Northern Rock and RBS branches
Jayne-Anne Gadhia's motto is "never give up". Just as well, perhaps, as the Virgin Money boss is accustomed to setbacks – but does not stop to think about them for too long. The imposing and gregarious Midlands-born banker tried and failed to buy Northern Rock before it was nationalised in February 2008 and then missed out on 318 Royal Bank of Scotland branches last year. She is now ready to do it all again, this time with simultaneous offers for 600 Lloyds Banking Group branches plus Northern Rock.
The 49-year-old insists that she does not dwell on past defeats – or on the possibility of further disappointments. "I move on. I don't dwell [on things]," she says. The same is true in her personal life. She had six courses of IVF to conceive her daughter, Amy (pictured with her above), when she was 40. She then had another six more before, she says, "age got the better of me".
"My motto is never give up," she says in a tiny meeting room in the firm's Edinburgh headquarters, complete with what she regards as the best views of the Scottish capital. As she faces the imposing Arthur's Seat, looming over the city, Gadhia – her married name – insists that the takeovers are still her plan B.
Plan A is to proceed with the organic growth of Virgin Money, which despite being dubbed a new entrant into the financial markets, began life on 19 December 1994 when the insurer Norwich Union – Gadhia's then employer – signed a deal with Sir Richard Branson's ambitious Virgin Group to launch savings and pensions products. Her aim, since buying the tiny Yeovil-based Church House Trust bank last year to obtain a banking licence, is to open 70 branches, although the first ones are unlikely to open before next year. For now, Virgin will start by opening four lounge-type concepts in Edinburgh, Norwich, Manchester and London by the end of the year. Saving accounts are included in the plan, with current accounts – seen as central to any successful step into banking – planned for 2012, later than rivals had expected.
If Virgin can take control of Northern Rock at the second attempt, it would propel her business plan forward by five years. She does not put a figure on the impact of taking on 600 Lloyds branches but calls it "a once-in-a-generation opportunity to acquire significant and complete banking capabilities".
As she prepares to embark on a roadshow to find £3bn of funding to enter first-stage bids for both Northern Rock and Lloyds, Gadhia is confident that Virgin Money's compound annual growth rate of 36% will be enough to arouse interest. Potential backers have already calling at the Edinburgh office, tucked on a quiet side street, to express an interest in standing alongside the US investor Wilbur Ross, who has already committed £500m to any bids. A move to a larger office is planned for next year.
Exuding charm and energy, Gadhia was born in Stourbridge in the Midlands before moving at 13 to Norwich. Her parents, both aged 83, have now followed their only child and live in a house attached to hers in Edinburgh.
She says she only ever applied for one job – accountancy training at Ernst & Young – which led her to Norwich Union, where she was involved in signing the deal to create what has become Virgin Money. When Royal Bank of Scotland bought the hugely successful Virgin One account in 2001, she went with it and ended up running a £70bn mortgage book for RBS until the end of 2006, when the "cracks were starting to show".
Gadhia left RBS because "it just made me miserable". Senior executives – although not the former chief executive Sir Fred Goodwin – wanted her to securitise sub-prime mortgages and make the business more like the soon-to-implode Northern Rock. She sold her shares at £21.98; the taxpayer bought into the bank at 50p, 18 months after her departure.
She contrasts the management style of Goodwin and Branson. "If I'd been bidding for Northern Rock for Fred, he'd have told me every day what he wanted me to do. Richard rings me every night to ask me what he can do to help."
"Northern Rock one" – as she calls the first attempt to buy it – is still fresh in her mind. She was swimming in the pool in the Haymarket hotel in London (her preferred place to stay when in the city) when her husband, Ashok, raced to tell her that the then chancellor, Alistair Darling, was on the TV saying Northern Rock was to be nationalised.
As far as she was concerned, the Financial Services Authority had approved Virgin's bid and the following day had to apply to the regulator to have the "change of control" reversed. Her plea to the new government is, rather than string Virgin along, to come clean and admit if remutualisation of the Newcastle-based lender is the preferred option. "Then we can focus on Lloyds," she says.
While she regards mutualisation as a "fantastic" concept, she sees plenty of drawbacks. "We've looked at acquiring a mutual that was subsequently acquired by a mutual. They [the members] would have had a capital payment [from us]. They never knew. I'm not sure how that's in the best interests of members," she said.
Brandishing images of what Virgin "lounges" might look like – similar to a stark yet trendy hotel restaurant – Gadhia admits that her other motto for running the business is "wanting to make everyone better off". This is shortened to "ebo". "I always ask: 'Is it ebo?'," she says when shown ideas about pricing or new products
Revealing some of the ideas behind the Virgin Money proposition, she says she wants it to be "trusted"; but while most bankers would set out that aspiration, she goes on to talk about being "adventurous" and adding a "bit of glamour". "We think beautiful, not functional," she says. It is a bit like Virgin Atlantic, she adds: aviation is a regulated industry, like banking, but it always "makes her smile" when she flies with the airline. She sees the brand as "feminine" and the business "very well balanced", with 47% of staff female.
If either the bid for the Lloyds branches or for Northern Rock are successful – she concedes that Virgin is unlikely to see both through to the final stages – her aim will be to have Virgin Money's brand plastered over the high streets. A stock market flotation is also on the cards. "It is a necessity," she says, as a way to raise capital.
She has also realised that a plan she had to retire at 60 – just a decade away – needs to be put on hold. "I only realised that last week," she says.
A decade ago, she was hampered by post-natal depression after six weeks' maternity leave from RBS. But now she has found work-life balance: "What I'm chuffed about is I feel as if I have a life, rather than a home life and a work life."
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CV Jayne-Anne Gadhia
Born 16 October 1961
Family Married to Ashok, one daughter
Education Culford School, Bury St Edmunds; University of London
Career 1982, trainee accountant at Ernst & Young; 1987, joined Norwich Union as an accountant; 1994, joined Virgin Direct as chief operating officer and compliance director; 1998, appointed managing director, Virgin One account; 2001-2006, under Royal Bank of Scotland group, managing director of Virgin One account, First Active, consumer finance and RBS Mortgages (managed mortgage book of £70bn);
2007, named chief executive, Virgin Money