Virgin Money Is Set To Be Sold For £2.9 Billion To Nationwide
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Nationwide Building Society has announced its plan to purchase Virgin Money for a significant amount of nearly £3 billion (£2.9bn). This move signifies the biggest banking deal in the UK since the financial crisis in 2008.
The two major lenders have come to an initial agreement on the takeover terms. If approved, this major purchase will reduce the competition among the four big UK banks. It would also form a joint group with £366bn in general assets, about 700 branches, and over 23 million customers.
The Newest Purchase Is Set To Place Nationwide As The UK’s Second-Biggest Lender
The purchase of Virgin Money, the sixth biggest-largest bank in the UK, would solidify Nationwide’s place as the second-biggest lender, with Lloyds Banking Group as the first. This is according to a recent data on outstanding home loans collected by the UK Finance.
The deal is the latest involving Virgin Money, which saw a significant growth spurt after attaining Northern Rock, the beleaguered lender, for £747m in 2011, from the government. This was close to four years after its acquisition prospect was nationalized in the period of the financial crisis.
Seven years later, Virgin Money became the center focus in another huge UK banking deal. It was acquired by Clydesdale and Yorkshire Banking Group in 2018 for £1.7bn. Although CYBG paid a huge amount of money to keep the Virgin Money brand, Nationwide intends to remove Virgin Money’s name totally from the high street in six years.
The Latest Development Aims To Provide Huge Profits For Nationwide
Moving away from the brand could provide millions of pounds in savings for Nationwide, which is under the leadership of Debbie Crosbie, former TSB manager. Virgin Money gave £17m to Virgin Group for using the name in the previous year. The Virgin Group is fully owned and founded in 1995 by Sir Richard Branson.
Branson anticipates around £414m from the latest deal. This is due to his residual 14.5% stake in Virgin Money. The billionaire mentioned that the venture was an opportunity to transform a stagnant industry and offer much-needed competition to customers.
The previous chief executive of Virgin Money, Jayne-Anne Gadhia embraced the possible deal. She still retains shares in Virgin Money and revealed that it’s sad to watch the brand go. However, she believed that the possible takeover would possibly raise benefits for customers of the brand.
Nationwide retains around 18,000 employees. It has revealed that there’s no plan to make any major modifications to the 7300 working members of Virgin Money any time soon. However, there’s no further information about longer-term job cuts.
