Virgin Money agrees £20m buyout of joint venture
CHALLENGER bank Virgin Money will acquire abrdn’s stake in a newly launched joint investment platform.
The £20m deal comes less than a year after the launch of Virgin Money Investments, a digital platform that includes a mobile app and offers a range of investment products for retail investors. It is the result of a partnership formed between the North East-based bank and the Edinburgh-based investor in 2019.
A new pension product was later added to the platform, where people can start saving from £25 a month or move existing pensions onto the platform. Virgin Money, which last year was managing about £3.7bn of assets and more than 150,000 customer
accounts, will now take full ownership of the product.
All existing staff working on the joint venture will move into Virgin Money with no job losses planned. Abrdn will continue to provide investment advice for the platform.
Allegra Patrizi, managing director business and commercial at Virgin Money, said: “Our joint venture with abrdn has successfully delivered a new investment service offering simple and straightforward investment options for customers. Taking full control of Virgin Money Investments will mean we can bring the investments and pensions business together with our deposits, mortgages, credit cards and daily banking, enabling us to help more customers feel confident to invest for the future and driving significant growth in assets under management.”
The deal follows recent first-quarter results from Virgin Money in which it said it had detected a return in the mortgage market with hopes interests rates have peaked.
The lender, which has its main sites in Newcastle, Glasgow and Leeds, described a “subdued” market in which unsecured lending, including credit cards, grew 2.8% but provisions for bad debts grew to nearly £640m, as customers falling behind on repayments edged higher.