The country’s largest building society has announced a £2.9bn deal to take over challenger bank Virgin Money.
A joint statement from the boards of Nationwide Building and Virgin Money says they have reached “preliminary agreement” on a cash acquisition which would pay shareholders 220p per share.
Virgin Money was formed in 2020 when Clydesdale and Yorkshire Bank owner CYBG bought the company that had taken over the former Northern Rock bank. It has its main offices in Newcastle, Glasgow and Leeds.
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The companies said that the takeover would create a combined group with total assets of around £366.3bn and total lending and advances of around £283.5bn. It would be the second largest provider of mortgages and savings in the UK.
In a message to existing Virgin Money staff, Swindon-headquartered Nationwide said that “values Virgin Money’s ongoing presence in Glasgow and Newcastle” and that it was committed to the bank’s 7,300 current staff. It said it was not looking at any job cuts in the short term.
Nationwide also stressed it will remain a mutual building society if the deal goes ahead. It will now look through Virgin Money’s books before making a firm offer.
The deal will not affect current branch closures recently announced by Virgin Money. The Virgin brand is likely to stay in use for the next six years, the companies said.
David Duffy, chief executive officer of Virgin Money, said: This potential transaction with Nationwide represents an exciting opportunity to build on the significant progress we have made in becoming the only new Tier 1 bank in recent history. The combined scale and strength would expand our customer offering and complete our journey in the banking sector as a national competitor.”
Nationwide chief executive officer Debbie Crosbie said: “Importantly, Nationwide will remain a building society, and a combined group would bring the benefits of fairer banking and mutual ownership to more people in the UK, including our continuing commitment to retain existing branches, as part of our ‘Branch Promise’ and leading levels of customer service. We believe the combination would create a stronger and more diverse business that will be better placed to deliver value to our members and customers, both now and in the future.”
In a separate announcement, Virgin Money said it had suspended a £150m share buyback programme announced last November to help the deal proceed.
Original artice – https://business-live.co.uk/all-about/yorkshire-humber
