Clydesdale parent group completes £1.7bn acquisition of Virgin Money

CYBG, owners of Clydesdale Bank and Yorkshire Bank, have completed a £1.7 billion acquisition of Virgin Money, creating the sixth biggest bank in the UK.

The combined group has over six million customers, around £84 billion of assets and around £70 billion of customer loans, including around £58 billion of mortgages.

The new group will offer a complementary mix of product expertise, taking CYBG’s strengths in personal and business current accounts and its successful digital platform, the two firms’ shared strengths in mortgages and Virgin Money’s expertise in credit cards and savings.

The enlarged bank is expected to generate £120 million of annual pre-tax cost synergies by the end of the financial year September 2021.

David Duffy, chief executive of CYBG, said the acquisition has created “the first true national competitor to the status quo in UK banking”.

He added: “Bringing the two banks together creates the UK’s sixth largest bank combining strong product, service and technology capabilities alongside an iconic brand with well-known consumer champion credentials.

“We are focused on delivering an excellent customer experience as we bring the two businesses together. This will be achieved through a clear, low-complexity, phased integration and re-branding plan over the next three years.

“This is a unique combination that will enable us to compete with the large incumbent banks.”

Josh Bayliss, Virgin Group CEO, added: “The Virgin Group started Virgin Money 23 years ago to shake up the UK’s banking sector. By putting customers and employees first, and working to make a real difference to people’s lives, we quickly became one of the most admired financial services businesses in the UK. Today’s announcement marks the beginning of the next chapter in the Virgin Money story.

“The combination of Virgin Money and CYBG will offer unrivalled service, an innovative digital platform and outstanding products, bringing huge benefits for customers, employees and communities alike. Together we have the size, scale and financial firepower to change banking for good.”

Mr Duffy and Ian Smith will retain their positions as CEO and CFO of the combined group respectively, while Virgin Money’s former chief executive Jayne-Anne Gadhia will be stepping down.

Ms Gadhia will support the combined group as a senior advisor to Mr Duffy for up to 18 months.

The remaining CYBG leadership team members will continue in their current roles and will be joined by Peter Bole and Hugh Chater from Virgin Money.

Mr Bole, formerly CFO of Virgin Money, will assume the role of group integration director with responsibility for leading the delivery of the integration programme across both businesses.

Mr Chater, managing director at the core bank of Virgin Money, will join the CYBG leadership team and be responsible for overseeing the day-to-day operation of the Virgin Money business in support the CEO.

Mr Duffy said: “I am delighted to confirm the Leadership Team for the combined group. CYBG and Virgin Money have similar customer and community focused values, and our team has a shared vision for how the new business will be a leading force in banking and deliver the best customer service in the UK.

“I am especially pleased Peter and Hugh will be joining our team. Both bring fantastic experience and expertise which, along with the wider Leadership Team, will be invaluable in helping us bring together the complementary strengths of both businesses and deliver the UK’s first true national competitor in banking.”