UK banking is to change after CYBG completes £1.7bn Virgin Money deal

FINANCE: Challenger bank now UK’s sixth largest after takeover

Challenger bank CYBG has the financial firepower to change how banking services are delivered in the UK for good.

The claim was made by Virgin Group chief executive Josh Bayliss after Clydesdale owner CYBG completed its £1.7 billion takeover of Virgin Money.

“Today’s announcement marks the beginning of the next chapter in the Virgin Money story,” Mr Bayliss said.

“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.”

The combination of the two companies creates a group with more than six million customers, £84 billion of assets under management and a loan book of circa £70bn, of which £58bn is related to mortgages.

The bank will operate on CYBG’s existing iB platform, with Virgin Money customers being migrated over during the course of the next three years.

The company has promised it will be a “low-complexity migration” rather than a “big bang” in which all of the accounts are switched at once.

The newly enlarged business is headed by David Duffy as CEO with Ian Smith retaining his role as CYBG chief financial officer.

Virgin Money chief executive Jayne-Anne Gadhia is stepping down, although she will remain as a senior advisor to David Duffy for a period of up to 18 months.

“Today marks an historic milestone for CYBG and Virgin Money, creating the first true national competitor to the status quo in UK banking with a clear ambition to provide customers with the best service in the UK,” CYBG chief executive David Duffy said.

“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.”