Nationwide Building Society is set to take over smaller rival Virgin Money after the pair agreed on a deal worth around £2.9billion.
Confirmation of the deal follows a preliminary agreement between the two companies earlier this month. Nationwide spent the past two weeks reviewing Virgin Money’s books before making the formal offer.
Nationwide said: “Nationwide’s board agreed that a binding offer to acquire Virgin Money was in the best interests of the society and its present and future members, following full consideration and the appropriate due diligence, and after taking comments from members into account.”
Virgin Money chief executive David Duffy will stand down on completion of the deal, which is expected during the final three months of 2024, while Nationwide boss Debbie Crosbie will head up the enlarged group.
Chris Rhodes, the chief financial officer of Nationwide, will take on the position of chief executive of Virgin Money.
How will the move impact Virgin Money customers?
In a statement, Mr Duffy said: “The sale is expected to complete in the fourth quarter this year, and Virgin Money will continue to operate as a separate business for some time after completion.”
For now, he continued: “There’s no impact to your Virgin Money products or services (including Clydesdale and Yorkshire Bank), and no changes to FSCS deposit protections.
“If anything changes in the future, we’ll let you know in advance.”
He added: “This is an exciting time as we look forward to a future as a strong combined group, with a wider range of products and services for all our customers.”
Stating its intentions for the Virgin Money business and the Combined Group, Nationwide said it “will seek to integrate” Virgin Money gradually, over multiple years, into the Combined Group, to bring together “the best of both organisations.”
Additionally, the building society emphasised its commitment to ensuring positive customer experiences and maintaining effective oversight after the completion.
In the medium term, Nationwide said Virgin Money will continue to operate as a separate legal entity within the Combined Group, with a separate board of directors and a separate banking licence held by Clydesdale Bank.
For the time being, Nationwide plans to keep using the “Virgin Money” brand for the purpose of Virgin Money products and services.
However, they have agreed with Virgin Enterprises to phase out this brand over six years from completion. By then, Nationwide will have rebranded the Virgin Money business.
Nationwide said it will extend its ‘Branch Promise’, and as a result it will retain a Nationwide and Virgin Money branch everywhere one is present, until at least the start of 2028.
Nationwide also stressed it will remain a mutual building society if the deal goes ahead and is given the green light by Virgin Money’s shareholders.
However, with any move like this comes a warning to customers. Mr Duffy said in his statement: “Unfortunately, fraudsters often take advantage of times of change to try and persuade people to share personal or financial information.
“We’ll never ask you for security details, over the phone or by email, so if someone does – please don’t share this information with them.”
Virgin Money is the UK’s sixth largest retail bank, with around 6.6 million customers and total lending of £72.8billion.
The group has 91 branches, a number that has significantly reduced in recent years due to a series of closures driven by the shift towards online banking.
Virgin Money was formerly the Clydesdale and Yorkshire bank group CYBG and rebranded after a £1.6billion takeover of Sir Richard Branson’s banking group in 2018.
Nationwide is Britain’s biggest building society with 605 branches and 18,000 staff and claims to have the UK’s single largest network of branches.
