Virgin Money, the personal finance arm of Sir Richard's company, has agreed to buy Somerset-based Church House Trust, in a move that will allow Virgin to gain a full banking licence.

Virgin Money will pay £12.3 million for Church House Trust, which has only 3,000 customers and no branches at all.

When contacted, Virgin Money said, "Having established an initial banking platform, the directors believe the acquisition of Church House will enable it to contemplate future acquisitions as appropriate."

The deal will also allow Virgin Money to own mortgages and current accounts this year.

Currently, Virgin Money presents savings, insurance policies and credit cards online.

Virgin is expected to introduce higher saving rates once the deal is completed. It is also touted as a potential suitor for the 'good bank' of the Northern Rock.