20th Jun 2018
Virgin Money has accepted a takeover offer from CYBG, the owner of Clydesdale Bank and Yorkshire Bank. The £1.7bn deal will create the UK’s sixth-largest bank, with 6 million personal and small business customers and a balance sheet of £70bn.
The merger will present a credible challenger to the existing high street big five – HSBC, Barclays, Lloyds Banking Group, Royal Bank of Scotland and Santander – giving customers greater choice, the CYBG bosses claim.
“It is clear to us that the combined group can transform the UK banking landscape and offer real benefits to customers and communities throughout the UK,” said Jim Pettigrew, CYBG chairman, adding that the union would be “a powerful force” to be reckoned with.
Although CYBG is the driver behind the takeover, the deal will mark the end of a high street presence for Clydesdale Bank and Yorkshire Bank, which will both fall under the Virgin Money brand. Clydesdale Bank, established in Glasgow in 1838, has 70 branches across the UK, while Yorkshire Bank, founded in 1859, has 97. The rebranding is expected to cost £60m, with CYBG committed to moving all its retail customer business over to Virgin Money.
“Together we will serve around 6 million customers, with the scale, capabilities and financial muscle to disrupt the status quo – and with a clear ambition to provide our customers with the best service in the UK,” said chief CYBG chief executive David Duffy, who will take the reins of the combined company.
The challenger bank is expected to offer a full range of services, uniting Virgin Money’s mortgage and credit card expertise with CYBG’s small and mid-size business banking credentials.
But some customers are unhappy that the historic Clydesdale and Yorkshire brand names will disappear after the merger. There are also suggestions that the move will see more than 1,500 job losses, although as of yet, it is unclear how many of the group’s combined 250 branches would be closed.
In the most recent UK Customer Satisfaction Index (UKCSI) from The Institute of Customer Service, Yorkshire Bank was the most improved organisation, with a score 10 points higher than in January 2017. Whether the bank will continue to be rated as favourably by customers following the merger remains to be seen.