Clydesdale name to go in £1.7bn buyout

But Branson to make £15m a year

CLYDESDALE Bank will disappear from Scotland’s high streets after a £1.7billion takeover of Virgin Money.

Virgin’s board has backed the move by Clydesdale and Yorkshire Banking Group, in a deal that will be followed by cost-cutting and job losses.

The combined business will be rebranded as Virgin Money, meaning the 180-year-old Clydesdale Bank and 159-year-old Yorkshire Bank names will vanish from high street branches.

The merger will trigger branch closures and result in 1,500 jobs going – but will net £15million a year for Virgin founder Sir Richard Branson.

The 67-year-old will also have a 13 per cent holding – worth around £570million – in the combined group.

Along with Bank of Scotland and Royal Bank of Scotland, Clydesdale is one of only three banks licensed to issue Scottish banknotes.

Last night, it confirmed that despite the rebrand, its currency would not be replaced by Virgin Money notes under the terms of its licence.

Bosses insisted most of the jobs due to be cut will be head office roles, as part of the efforts to save £120million a year.

They admitted some branches will disappear from the combined total of 243, but stressed this will account for only £15million of the savings. The group will have its headquarters in Glasgow – with Clydesdale and Yorkshire’s Jim Pettigrew continuing as chairman alongside finance chief Ian Smith.

Virgin Money chief executive Jayne-Anne Gadhia said: ‘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.’

The merged company will have around six million customers and 9,500 staff, although the workforce will be reduced by about a sixth.

Clydesdale and Yorkshire bosses have pledged to maintain a major presence for at least three years at Virgin’s headquarters in Gosforth, Newcastle.

The merger combines Clydesdale and Yorkshire’s 1.8million personal current accounts and £24.1billion mortgage book with Virgin’s £3billion credit card book and £30.8billion savings accounts. The 100,000 Virgin current account holders will be moved to Clydesdale and Yorkshire’s systems using existing switching systems, meaning bosses are confident there is no risk of an IT meltdown such as the one suffered by TSB.

Clydesdale chief executive David Duffy said he intended to focus on expanding the group’s online banking operation, building on the ‘B’ app it launched in 2016 for affluent young people, which now has more than 100,000 accounts.

There are also plans for rapid expansion in business accounts.

The deal must be approved by 75 per cent of Virgin Money shareholders and be waved through by regulators. It is expected to be completed later this year.

Virgin Money branded services are available in Australia and South Africa as well as the UK.

SIR Richard Branson will make £15m a year from the sale of Virgin Money – while 1,500 staff lose their jobs.

Virgin’s board backed a £1.7bn takeover by Clydesdale and Yorkshire Banking Group that will be followed by a wave of cost cutting.

The tie-up will see the combined business rebranded as Virgin Money, meaning the 159-year-old Yorkshire Bank and 180-year-old Clydesdale Bank names will vanish from the High Street.

In exchange for rights to the brand, Virgin founder Branson will get at least £15m a year in royalties when the merger is complete. The 67-year-old businessman will also have a 13pc holding in the combined group worth around £575m.

Bosses insisted that most of the 1,500 jobs due to go will be head office roles, with few branches set to shut as part of efforts to save £120m a year.

They admitted some outlets will disappear from the group’s total of 243, but stressed this will only account for £15m of the savings.

Clydesdale and Yorkshire chief operating officer Debbie Crosbie said: ‘There are some obvious areas of overlap where we will have two branches on the same High Street. There will be minimal closures.’

The merged company will have around 6m customers and 9,500 staff, although this number will be reduced by about a sixth or around 1,500.

The deal, however, must be separately approved by 75pc of Virgin Money and Clydesdale and Yorkshire shareholders.