Richard Branson's Virgin Money is planning to make a formal bid in July for 600 branches being sold by Lloyds Banking Group, reports said today.

Part-nationalised Lloyds, which bought failed rival HBOS at the height of the credit crisis in 2008 under a government brokered deal, was told by regulators in November 2009 it had four years to sell at least 600 branches.

"This can happen quickly and smoothly," Mr Branson told the Financial Times. "We are a serious bidder and can give the government what it wants through tough competition."

Virgin Money, Mr Branson's financial services business, has held talks with a "handful" of British and US investors and expects to have financing of up to £3 billion in place by the end of July, the FT said.

Other parties likely to be interested include retailer Tesco's finance arm, new bank venture NBNK and overseas lenders such as National Australia Bank, analysts say.

Reuters