Virgin seen as potential Northern Rock buyer: report

LONDON (Reuters) - The British government is considering options for nationalized lender Northern Rock, including a sale of the bank to Richard Branson's Virgin Group, the Sunday Express reported, citing unnamed sources.

The Express said the Treasury was considering Virgin as a potential buyer of Northern Rock, although it had yet to decide whether a sale of the bank would deliver the best return for taxpayers.

The Treasury said there was no plan to sell Northern Rock at this stage.

"There are no plans currently to sell Northern Rock," a Treasury spokesman said.

"We have always maintained that any future sale would need to clearly demonstrate value for the taxpayer and maintain financial stability, and that any future decision will not be rushed."

Any sale of Northern Rock would have to wait until the European Union competition authorities deliver their verdict on the company's state-assisted restructuring, expected during the summer.

Virgin declined to comment on the newspaper report, but a spokesman added: "We've always been interested in becoming a bank and we will continue to study the market for any opportunities."

The company was among the private-sector bidders who tried to buy Northern Rock after the lender was forced by the credit crunch to seek emergency funding from the Bank of England in September 2007.

Northern Rock was nationalized in February last year after the government decided all the bids were too low.

(Reporting by Myles Neligan; editing by John Stonestreet)