Bank reassures MP on takeover
FEARS FOR VIRGIN MONEY STAFF AFTER BUY-UP
THE company poised to take over Newcastle’s Virgin Money has reassured a city MP over the future of jobs at the bank.
Newcastle Central MP Chi Onwurah last month wrote to CYBG – which owns the Clydesdale Bank, Yorkshire Bank and B brands – after the two firms reached an initial agreement on a £1.7bn takeover.
Now CYBG has replied to Ms Onwurah with a number of reassurances, with the MP welcoming the Leeds firm’s “helpful” tone.
Ms Onwurah had raised concerns over job security for Virgin Money staff, with around 2,000 people working at the company’s Gosforth base. Many of those staff remain from the days of Northern Rock, whose assets were bought by Virgin Money in 2012.
In his letter to Ms Onwurah, CYBG’s chief executive David Duffy says: “We appreciate the importance of the Virgin Money base in Gosforth both to the Newcastle and wider North East economy.
“A key factor in our offer is our confidence in the strength of the Virgin Money business and the talent of the people who have helped build it, including those teams based in Gosforth.
“Obviously, you have seen the commitment we have made to maintaining a substantial base in Gosforth for at least three years. This time period is in line with the timescale for the integration of the two businesses laid out across a number of areas in our announcement.”
Mr Duffy said the three-year time period laid out to bring the two banks together would allow for many of the 1,500 job losses they are targeting in the merger to be achieved through natural attrition. It should also give time to bring together IT systems and avoid problems recently suffered by TSB, he said.
Mr Duffy also pledged to maintain a £1m donation to the Virgin Money Charitable Foundation for the next three years and said that, while it was too early to commit to any longer-term spending, “we have noted the importance you place on the foundation supporting specific projects in the North East”.
The takeover – which has to be agreed by the shareholders of the two existing banks – will create a combined group larger than many of the existing “challenger” banks, with greater ability to take on the big four of HSBC, Lloyds, Barclays and NatWest/RBS.
It also brings together CYBG’s strengths in personal accounts and business banking with Virgin Money’s strong market share in mortgages and credit cards.