Virgin Money will base its new operations in Edinburgh where it will create 200 new jobs in a boost to the city which has suffered from large-scale job cuts.
The financial arm of Richard Branson's Virgin Group said the new jobs will bring its total workforce to 500.
News of the jobs will be a boost to the Scottish capital with both Royal Bank of Scotland and Standard Life set to axe staff.
The group's expansion in Edinburgh follows news banking giant Barclays is creating up to 600 new jobs in Glasgow.
Last January, Virgin Money bought regional bank Church House Trust as it set out plans to make inroads into the UK banking market.
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