CYBG, Virgin Money join forces to take on Britain's biggest banks

The CYBG deal values Virgin Money at around £1.7bn. Shareholders will own 38% of the group

The CYBG deal values Virgin Money at around £1.7bn. Shareholders will own 38% of the group

Virgin Money was formed in a partnership between Virgin Direct and Norwich Union in 1995, and its Norwich office in Whiting Road is home to its in-house design studio.

Virgin Money shareholders would receive 1.2125 new CYBG shares under the offer.

Britain's Clydesdale Yorkshire Banking Group today said it had bought Richard Branson's Virgin Money for 1.7 billion pounds, as it seeks to challenge the dominance of top lenders.

Like Duffy, CYBG's chairman, Jim Pettigrew and its finance director Ian Smith will all retain their roles in the combined group.

She added: "This is a compelling deal for our shareholders, that accelerates value delivery and represents the beginning of the next chapter of the Virgin Money story".

But the companies have admitted that, from their combined workforces of around 9,500 staff, up to 1,500 jobs are likely to go.

CYBG said the combined group would have about 9,500 employees, but it meant to reduce that total by about one-sixth, suggesting about 1,500 jobs would go.

"We can be agile enough to deliver a much better deal for the customer".

The deal adds to a number of transactions among a handful of smaller banks in the United Kingdom as they seek to raise funds and steal business from the nation's top lenders.

CYBG shares were trading higher at around 0.6% in early trading, while Virgin Money shares were up as much as 2.4%.

The deal will see all of Yorkshire Bank, established in Halifax in 1859, and Clydesdale Bank's retail customers move to the Virgin Money brand.

CYBG's David Duffy will stay on as chief executive, leaving Virgin Money boss Jayne-Anne Gadhia to serve in a consultancy role as his senior adviser.

The banks, which had until 5pm on Monday to strike an agreement, said the combined group would "create the UK's first true national competitor to the large incumbent banks" with over six million customers.

It will create Britain's sixth-largest bank by assets, around twice the size of its largest rival and with the firepower of the Virgin brand, which the combined group will pay a royalty to keep.

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.