Serial entrepreneur Richard Branson is planning to buy a privately-held British bank to extend the Virgin brand's reach into retail banking.

Virgin Money has put forward a bid, which has been approved by the FSA, and values its target of Church House Trust - a bank with 3,000 private customers and £50m in deposits - at just under £12.5m.

"The Church House Trust business offers us a strong platform for growth. Virgin Money aims to bring simplicity to the UK banking market which has traditionally been a complex sector," said Sir Richard.

Many small business owners have experienced difficulties accessing credit and would welcome increased competition in the sector.