Blackstone, the U.S. private equity firm, has been approached by Sir Richard Branson's Virgin Money about backing a renewed bid for state-owned Northern Rock.  

The buy-out house is among several firms that Virgin has talked to as it works on finding a partner for its financial services business in preparation for its move on Northern Rock's “good bank” spun out of the state-owned lender and thought to be worth up to £2b.
Last week, Virgin bought the little-known Church House Trust bank, which has 3,000 customers and no branches, for £12.3m. The acquisition gave Virgin a full banking license as CHT already has systems and processes approved by the Financial Services Authority that enable it to offer mortgages and current accounts.   Its talks with Blackstone underline Sir Richard's ambition to break into the UK mortgages and savings market and could lay the foundation for the first private equity-backed UK bank. A source close to the buy-out house said its interest in Northern Rock relied on working alongside a trade partner with the right operational understanding of running a bank.
In 2007, Blackstone was hired in an advisory capacity by the then ailing Northern Rock after earlier being mooted as a potential buyer of the mortgage bank. Sir Richard's initial £1.5b tilt at Northern Rock in 2007 came as part of a consortium that included the later-troubled U.S. insurance group AIG, U.S. investor Wilbur Ross, hedge fund Toscafund and Hong Kong-based First Eastern Investment.
(Source: Daily Telegraph)