Wall Street billionaire Wilbur Ross acquires large stake in NBNK Investments

Wall Street billionaire Wilbur Ross has acquired a large stake in listed retail and small business bank, NBNK Investments, setting the stage for a major consolidation of the banking and insurance sector.

Ross, who held a 45-per cent stake in Virgin Money, has agreed to buy up to 37.8 per cent of NBNK at 39 p a share in a deal that would see a £8 million cash infusion into the cash shell and set it free to look for financial services assets. NBNK shares were up 1.5 to 41p - still well below 2010's £1 float price.

According to Ross, there was a huge dislocation in the financial services industry in Europe, adding he thought there were a lot of assets that would benefit from being backed into a public market listing.

The move has given rise to speculation that the billionaire could use NBNK as a vehicle for a reverse takeover of Virgin Money, giving Virgin access to the public markets.

However, according to Ross, the NBNK deal had been done for very different reasons. He said the two companies would obviously be friendly. He said, if that made sense at some point it would be considered but there were no plans right now.

Ross would take over as NBNK chairman from Lord Levene, while chief executive Garry Hoffman and non-executive director Lord Forsyth would step down.