CYBG in £1.7bn Virgin Money takeover

Under the deal, on completion of the offer, Virgin Money shareholders will own approximately 38 percent of the combined group.

CYBG, which owns Clydesdale and Yorkshire banks, said the combined group would have about 9,500 employees, but it intends to reduce that total by about one-sixth, suggesting about 1,500 jobs would go. Many of those would be achieved “via natural attrition”, it said.

Virgin Money was founded in 1995 and grew significantly in 2012 when it completed a deal to purchase the beleaguered Northern Rock for about £747m.

Having identified the “strength” of the Virgin Money brand, CYBG said it has entered into an agreement with Virgin Enterprises in relation to the use of the Virgin Money brand following the deal.

Jim Pettigrew, chairman of CYBG, David Duffy, chief executive of CYBG and Ian Smith, chief financial officer of CYBG will retain their current positions in the combined group.

Duffy said: “By combining two of the UK’s leading challenger banks, we will create a national, full-service bank with the capabilities needed to compete effectively with the large incumbent banks. We are bringing together CYBG’s 175-year heritage in serving retail and SME customers and advanced digital technology, with the iconic Virgin Money brand and consumer champion credentials.

“Together we will serve around six million customers, with the scale, capabilities and financial muscle to disrupt the status quo – and with a clear ambition to provide our customers with the best service in the UK.”

Meanwhile, Virgin Money chief executive Jayne-Anne Gadhia, who won the Outstanding Contribution to the Credit Industry award at this year’s Credit Awards, has agreed in principle to stay on as a consultant for a limited time after the deal goes through. She has been in her current role for more than 10 years and at the vanguard for championing women in financial services.

Gadhia said: “The offer reflects confidence in our strategy, our track record of delivery and the complementary strengths of the two businesses. The combination of Virgin Money with CYBG will have greater scale to challenge the big banks. It will also accelerate the delivery of our strategic objectives, particularly the expansion of the products we offer to customers.

“I am especially pleased that we have received a number of important commitments from CYBG. The Virgin Money Foundation will continue to contribute to essential programmes in the North East and beyond. We have obtained assurances from CYBG regarding our employees and our Gosforth headquarters. The combined group will remain a committed voice behind the Women in Finance Charter as well as working to reduce the gender pay gap.”