The industry is still aflutter with talk of the UK breaking up Royal Bank of Scotland (including its Citizens unit in the United States), Lloyds and Northern Rock at the behest of the European competition authorities. They claim that by splitting these very large financial institutions that received significant amounts of bailout money that consumers in the UK will have more banking choices. Questions remain as to just how much of a difference this will make to the man on the street.

The UK’s Telegraph examines this issue and poses some scenarios as to how these “new” banks would build enough market share to be competitive with their former parents. One would be a foreign lender buying the branch network of one of the banks. In that case, an analyst told the Telegraph, there would be a ready-made customer base and the buyer wouldn’t need to try as hard to attract new customers.

However, another interesting scenario would be if one of the UK’s nontraditional banks were to buy the divested branches of RBS or Lloyds, such as supermarket giant Tesco or Virgin, which is filing for a banking charter in the UK.

David Black, a banking analyst with consultancy Defaqto, told the Telegraph, “Tesco is a less likely buyer in my view as it could build up a branch network in its existing stores. But buying one of these networks could be a quick route to a network for Virgin.”

And according to some sources, Virgin’s Richard Branson may have just that thought on his mind.