SIR Richard Branson's plans to bring a big part of his Virgin Bank to Edinburgh brings some respite to a city that has suffered from the financial services fall-out and also tells us something about the way the sector is now evolving.
The events of the past year or two have tarnished the old-established names and their claim to stand for prudence and integrity. The arrival of Branson's modern, still-youthful Virgin brand, with its intention to grow a substantial operation in Edinb
urgh, is the latest signal that they have a fight on their hands.
Virgin, like Tesco, now represents a new image of Britain's financial services. These are brands that attract loyalty and stand for the sort of reliability and trustworthiness that were once the preserve of the traditional banks.
Virgin's plans, which we outline on page one today, emerged on the day that the banking veteran Sir Victor Blank was facing shareholder opposition to his re-election as Lloyds' chairman. Not quite a case of out with the old, in with the new (he was re-elected], but certainly a sense that the old can no longer be so confident and complacent about customer reaction to their way of doing business.
Edinburgh, that bastion of the old guard, now finds itself in the vanguard of the new names in banking. Virgin and Tesco have been dabbling with financial services for some years, but now their time has come.
But maybe we should not be so surprised. After all, Edinburgh was at the forefront of internet banking with the launch of Intelligent Finance and before that the Royal Bank of Scotland spawned tele-insurance with Direct Line. Innovation is part of the landscape and these latest plans by Virgin have to be seen as part of the sector's ability to reinvent itself.
More pertinently, the Virgin development is creating work, including highly paid jobs at a time when Scotland's financial services industry badly needs some good news.
It was stated in this column at the turn of the year that the crisis would throw up some opportunities for Scotland, and Edinburgh in particular, as the fall-out created a pool of available talent. Virgin's plans to bring more than a hundred jobs to the capital are proof that there are indeed opportunities to be grasped.
Predators targeting bargains in oil sectorTHE oil sector has witnessed a rash of takeover and merger activity which coincides with a resurgent oil price, now heading back above $70 a barrel, and talk of economic recovery. This is no coincidence.
The explosion in the number of oil firms in recent years has inevitably given rise to the prospect of consolidation. Now that the price of a barrel is off the floor and economic indicators are pointing upwards, the bargain hunters are making moves on those in a weaker position or sitting on huge under-exploited assets.
Premier Oil bought Oilexco, while BG Group is completing the takeover of Australia's Pure Energy Resources. Dragon Oil may fall to its major shareholder, the Emirates National Oil Company. Others being targeted are those active in new fields in such places as Iraq, Ghana and Uganda where they need further financing to get their discoveries to market. No surprise then that Heritage Oil is attracting interest and may announce details of a deal this week, as detailed below, with Turkish firm Genel Enerji.
The mid-sized explorers are the more likely to be picked off, though among those keen to remain independent are Irish firm Tullow Oil and Dana Petroleum, the Scottish explorer which is keen to be predator rather than prey. Some will probably stay out of the picture, mainly the oil services companies, despite speculation that Aberdeen-based Wood Group could be drawn into the frame.
Another that may yet escape the clutches of the predators is Venture Production, also based in the granite city. Though Centrica holds 24 per cent of the company, its chief executive Sam Laidlaw told this newspaper a fortnight ago that he may spend the £1 billion left over from last year's rights issue on other assets, and he spent some of it last week on a gas field in Trinidad.
The flow of new funding augurs well for the oil sector, providing the means to develop fields and grow businesses. But others are managing without the need for third party backers. Dana has grown into one of Scotland's biggest companies and it is encouraging to hear chief executive Tom Cross declare that it is not for sale.
Not only is it providing Scotland with another company of scale, it is rewarding shareholders. Dana shares have risen 32 per cent this year, outperforming the 16 per cent gain in the 40-member Dow Jones Europe Oil & Gas Index.
The full article contains 811 words and appears in Scotland On Sunday newspaper.
