The Virgin Money brand was founded by Richard Branson in March 1995. It was originally known as Virgin Direct, and pioneered index tracking by launching a value personal equity plan into the market. In the 2000s Virgin Money expanded its operations around the world. Virgin Money announced plans to become a retail bank, and attempted to purchase Northern Rock in 2007 before it was nationalised by the British Government. Virgin applied for its own banking licence from the Financial Services Authority in 2009, and gained one through the acquisition of Church House Trust the following year. Virgin bought Northern Rock in January 2012 and rebranded the business as Virgin Money.[4]
In June 2018, Virgin Money agreed to a takeover by CYBG plc (formed by National Australia Bank (NAB), out of several of its UK subsidiaries, in February 2016) which was completed in October 2018. Virgin Money was merged into Clydesdale Bank plc on 21 October 2019, continuing as a trading name and operating under Clydesdale Bank plc's banking licence. It was planned that Virgin Money UK would phase out the Clydesdale Bank, Yorkshire Bank and B brands in favour of the Virgin Money brand.[5][6] However, in March 2024, the bank's parent company agreed to be acquired by Nationwide Building Society in a £2.9 billion deal that was completed on 1 October 2024 and will see the Virgin Money brand name being phased out between 2026 and 2028.[7][8]
History
Formation of Virgin Money UK
Virgin Money UK was launched as Virgin Direct Personal Financial Services in partnership with Norwich Union on 3 March 1995 offering personal equity plans and launched Virgin One, in a partnership with the Royal Bank of Scotland (RBS), in 1997. That year, Australia's AMP bought Norwich Union's 50% stake in Virgin Direct.[9] In 2000, virginmoney.com was launched as a price comparison website.[10] RBS bought out Virgin's stake in the One Account joint venture in 2001.[11]
In 2002, Virgin Direct merged with virginmoney.com to form the current company. Virgin Money expanded its operations around the world in the 2000s. The Virgin Group took 100% ownership of Virgin Money in April 2004, buying the remaining 50% stake for £90 million from AMP/HHG.[12]
In 2007, Virgin made a bid to acquire the Northern Rock bank; this initial bid failed. In an interview with The Times on 9 March 2009, Branson stated that he still hoped that Virgin Money would expand its operations into the banking sector, saying "We are going to get back into the mortgage business and we will become a bank either by acquisition or by getting our own banking licence. You will see us become a consumer bank within the next couple of years."[13]
In October 2009, Virgin Money applied to the Financial Services Authority for a full banking licence.[14] In February 2011 they announced their intention to lease a large office in Edinburgh.[15]
On 8 January 2010, Virgin Money announced the acquisition of Church House Trust for £12.3 million, giving Virgin a small foothold in the UK banking market. Although Church House Trust had no branches, it provided Virgin with a banking licence. As part of the acquisition, Virgin agreed to invest a further £37.3 million of new capital into the business.[16] On 26 January the deal was declared unconditional.[17]
In late January, Sir Brian Pitman became the Chairman of Virgin Money; Pitman had previously been an advisor to Virgin during the attempted buyout of Northern Rock in 2007.[18] In February Pitman stated that the company was interested in acquiring some branches of other banks which lie in good locations; branches belonging to the RBS and Lloyds were reported as possible candidates.[19] Following Pitman's death Sir David Clementi was appointed Chairman. In April 2010, Wilbur Ross invested £100 million in Virgin Money for a 21% stake in the company. Wilbur Ross had previously supported Virgin Money in its previous bid for Northern Rock. James Lockhart, Vice Chairman of WL Ross & Co, joined the Virgin Money board.[20]
A branch of the Northern Rock with Virgin Money branding on Briggate in Leeds
On 13 October 2007, Sir Richard Branson announced that Virgin Group were putting together a consortium of financiers to propose to plough millions into the troubled Northern Rock bank and in return take an approximate 30% stake in the business, bringing the current financial products offered by Virgin and combining them with Northern Rock's own financial products.[21] By February 2008, Virgin were the favoured bidders for the bank and announced in its official submission to the government that, if successful, they would have merged Northern Rock and Virgin Money, naming the new company "Virgin Bank".[22] The initial bid was not successful, and Northern Rock was then nationalised.[23]
During 2011 the government again asked suitors to come forward with proposals for Northern Rock. On 17 November 2011, it was announced that Virgin Money were to buy Northern Rock for £747million, with other potential payments of up to £280million over the next few years.[24][25] By July 2012, a further £73 million was paid as deferred consideration. WL Ross & Co increased its stake in Virgin Money, owning 44% of the combined business by putting £260 million into the deal.[26] Both Abu Dhabi-based Stanhope Investments and Branson's Virgin Group invested £50 million in the Northern Rock deal.[26] In 2014, Virgin Money repaid a further £154.5million that it had received as part of the refinancing package.[27]
There were to be no further job losses, except for those previously announced. Virgin has also pledged to keep the headquarters of the savings and mortgages business in Newcastle upon Tyne.[28] On 9 January 2012, Richard Branson visited the Gosforth site and some branches of Northern Rock around Newcastle, including one with temporary Virgin Money branding.[29]
On 22 June 2012, Virgin acquired the remainder of the Gosforth site from Northern Rock (Asset Management) plc, the "bad-bank" which had been split from Northern Rock prior to the sale of the bank to Virgin.[30] On 23 July it was announced that Virgin would also be acquiring £465 million worth of mortgage assets from Northern Rock (Asset Management).[31] On 12 October, Northern Rock plc was renamed Virgin Money plc and the Northern Rock brand was phased out.[32]
In January 2013, Virgin agreed to buy £1billion of assets from MBNA; these are the Virgin Credit Card assets which MBNA has serviced and managed in partnership with Virgin Money since 2002. The credit card book was integrated into Virgin Money's operations in 2014, and was expected to create 150 jobs at the Gosforth offices. The former Vice Chairman of MBNA Corporation, Lance Weaver, became Virgin Money's President of Virgin Money Cards.[33] A further £363 million credit card asset portfolio was purchased from MBNA in 2014.[34]
In October 2014, it was announced that Virgin Money Holdings (UK) plc would float shares on the London Stock Exchange in order to raise approximately £150million which would go towards expanding and enabling it to continue to hire and maintain its existing base of top staff members.[35] A successful offer led to a final payment of £50million to the UK Government with respect to the company's IPO following the purchase of Northern Rock.[36]
Church House Trust Limited was sold to Ocean Industries S.A. for £13 million on 30 November 2014.[37]WL Ross & Co reduced its stake in the company to 23.3% in April 2015; Stanhope reduced its stake to 1%.[38] WL Ross & Co sold its remaining stake in November 2016.[39]
As of 2017, the business had 3.34million customers.[40]
Acquisition by CYBG plc
National Australia Bank acquired Clydesdale Bank in 1987 and Yorkshire Bank in 1995.[41]Fred Goodwin, an accountant working for Touche Ross, worked on the acquisition of Clydesdale Bank.[41] In 1995 Goodwin, with little direct banking experience, was appointed deputy CEO of the Clydesdale Bank.[41] Clydesdale Bank and Yorkshire Bank began operating under a single banking licence in the UK in 2005: Yorkshire Bank became a division of Clydesdale Bank but retained its own name for trading purposes.[42]
National Australia Bank confirmed in October 2014 that it planned to exit the UK, and was considering a number of options for Yorkshire Bank and Clydesdale Bank, including a possible stock market listing.[43] Clydesdale Bank and Yorkshire Bank were demerged and placed in a separate holding company, CYBG plc (Clydesdale and Yorkshire Banking Group[44]), which was listed on the London Stock Exchange and Australian Securities Exchange for conditional share trading on 3 February 2016 and unconditional trading from 8 February 2016.[45]
On 7 May 2018, it was reported that CYBG plc had made an all-share offer of £1.7bn to acquire Virgin Money UK.[46] Payment was to be in terms of a share offer where CYBG would give 1.2125 new shares for each Virgin Money share which was a 19% premium to the current share price and would see Virgin Money comprising 38% of the new combined group which would become the UK's sixth-largest bank with 6 million personal and small business customers, and total lending of £70bn.[47]
On 18 June, it was announced that the takeover had been agreed. Arrangements were made for CYBG to license the Virgin Money brand for £12 million a year (later rising to £15 million a year) and to move all its retail customers to Virgin Money over the following three years.[48] The acquisition of Virgin Money plc by CYBG was completed on 15 October 2018 and shares in the holding company Virgin Money Holdings (UK) plc were therefore delisted from the London Stock Exchange.[5]
It was reported that the deal may result in 1,500 job losses. The retail banking operation would be fronted by the Virgin Money brand and the Clydesdale and Yorkshire Bank brands would disappear from the High street. Virgin Money CEO chief executive Jayne-Anne Gadhia will be retained as a senior advisor and will receive around £1.8m redundancy, £1m bonus, £5.1m in shares to add to her existing £8.9m shares. The all-share deal buyout gave her a paper profit of around £12.5m.[49]
Rebrand to Virgin Money UK plc
In June 2019, CYBG plc announced its plans to consolidate its businesses under the Virgin Money brand. B and Yorkshire Bank, which existed as trading divisions of Clydesdale Bank plc, began to use the Virgin Money name in late 2019 and Clydesdale Bank used the new name from late 2020 to early 2021.[50] In preparation for re-branding, the existing Virgin Money plc was merged into the existing Clydesdale Bank plc on 21 October 2019.[51]
The group's name was changed from CYBG plc to Virgin Money UK plc on 31 October 2019.[52][53]
CEO David Duffy's pay rose by 84% from £1.8m in 2018 to £3.4m in 2019. This was despite an investor revolt in which a third of shareholders opposed the payout, citing the fact that company had suffered its second consecutive annual loss, caused by a £385m charge for mis-sold payment protection insurance. Duffy's increase was largely due to a bonus of £1.3m linked to the 2015 demerger of Virgin Money's predecessor bank, CYBG, from National Australia Bank, as well as incentives from 2016.[54]
On 7 March 2024 Nationwide Building Society, the UK's largest building society, announced that they had made an offer to buy the bank's parent company, Virgin Money UK plc, for £2.9 billion.[57] Under the terms of the deal the resulting company would be rebranded under the Nationwide banner over the next 6 years with the Virgin Money brand eventually disappearing.[57] Nationwide intends to remain as a building society and for the "medium-term" the Virgin Money business would remain its own legal entity with its own banking licence.[57] Nationwide aims to not make any material changes to Virgin Money's 7,300 employees "in the near term".[57]
Virgin Money's shareholders approved the deal on 22 May and it is expected to complete by the end of the year.[58] On 31 May, the Competition and Markets Authority said that they would be investigating the proposed merger regarding the potential lessening of competition within the banking sector in the UK.[59] On 19 July, the Competition and Markets Authority approved the transaction.[60][61] The acquisition was completed on 1 October 2024 and shares in Virgin Money UK plc were delisted from the London Stock Exchange and the Australian Securities Exchange.[62][63][64][8][65]
Branson made £724 million from the deal, which includes £310 million for Nationwide's use of the Virgin Money brand for up to six years.[66]
Corporate affairs
Identity
A Virgin Money store on Briggate in LeedsInterior of Virgin Money's Manchester lounge
Virgin Money's logo is focused around the main logo of Virgin Group, which is an underlined word 'Virgin' in a red circle. The most recent version of the logo was adopted in December 2019 and has the word "Virgin" in a red circle forming the letter O in the word "Money". The previous logo was adopted in January 2012 and was introduced to signify the purchase of Northern Rock, which used a magenta logo. Virgin Money's January 2012 television advert showcasing the launch of banking products showcased a number of Virgin companies and was directed by Duncan Jones and worked on by Beattie McGuinness Bungay.[67] Virgin Money's older logo was the word 'Virgin' in a red rounded skew rectangle, similar in shape to a credit card, followed by the word 'Money'. A previous logo had the word 'Virgin' in a large circle and three smaller circles above the word 'Money'. Virgin Direct's logo had been a more simplistic rendering of the company name, in white on top of a red rectangle with a semicircle attached on the left side.[68]
Offices
Virgin Money's headquarters are the former Northern Rock offices, renamed as Jubilee House, in Gosforth, Newcastle upon Tyne. The site is next to the Regent Centre business park and comprises two black and grey buildings built in the 1990s and some additional sandstone and glass buildings built in the early 2000s.[69]
The Virgin Money Northumberland Street store, Newcastle upon Tyne. This store was formerly a Northern Rock branch and the branded clock, which retains its Northern Rock lettering, became a well-known symbol of the former bank's collapse.
Virgin Money offers a range of savings and investment products, mortgages, credit cards, insurance and pensions. The merger with Northern Rock widened Virgin Money's range from a previous focus on credit cards and insurance products, and the first savings accounts to be offered under the Virgin brand were issued in January 2012.[71] These were gradually supplemented by other additional banking products under its own brand name. The bank launched its own range of basic current accounts in July 2014, initially only in Scotland and Northern Ireland. This was expanded to the rest of the UK in 2015.[72]
In November 2011, the bank opened the first of its concept lounges in Norwich, followed by Edinburgh, Manchester, London and Glasgow with plans to open more.[73] Virgin renamed Northern Rock's 75 branches as stores, and the first to receive a temporary Virgin makeover opened on 9 January 2012.[29] Richard Branson has also indicated in interviews that he would like to open branches at railway stations; Virgin Rail Group operated a number of railway stations at the time.[74] The full rebranding process, which also included the combining of the Northern Rock website into the existing Virgin Money website, was completed by October.[75]
Virgin Money launched a fully functional current account in December 2019. The account uses technology previously used by the "B" account offered by Clydesdale Bank. All existing "B" accounts were converted to Virgin Money current accounts as part of this process.[76]
Virgin Money Giving is a not-for-profit company set up by Virgin in October 2009. From 2010, the Virgin Group signed a five-year deal to be the official sponsor of the London Marathon; the inaugural Virgin London Marathon was on 25 April 2010. This sponsorship led to the creation of Virgin Money Giving, with the aim "to help all fund-raisers raise more money for good causes".[78] This sponsorship was also extended to at least 2017, and since the 2014 race has been known as the Virgin Money London Marathon.[79]
Virgin Money Foundation
The Virgin Money Foundation is the charitable arm of the bank and was founded in 2015. The bank has initially pledged £4 million to the charity over 4 years, and the UK Government has committed to match that pledge.[80]
Sponsorship
Virgin Money led the sponsorship of the London Marathon from 2010 to 2020. Virgin Money also lent its name to the yacht that Sir Richard Branson used to attempt to break the Transatlantic sailing record.[81] Since 2011 Virgin Money has sponsored events at the Edinburgh Festival Fringe.[82]
Virgin Money were the shirt sponsor of Newcastle United F.C. for the 2012-13 season, a club that had a sponsorship deal with Northern Rock since 2003.[83] Newcastle United's shirts also displayed the Virgin Money logo for the remainder of the 2011–12 season, fulfilling Northern Rock's deal at the time of being bought by Virgin. To coincide with the launch of Virgin Money's rebranded stores, Richard Branson appeared in Newcastle, wearing a Newcastle United shirt, with a number of Newcastle United's footballers. The deal between Virgin Money and Newcastle United had also covered the 2013-14 season, but the club decided to end the deal a year early.[84]
Virgin Money are the former title sponsor of the Cyclone, the UK's biggest cycling festival, which had previously also been sponsored by Northern Rock. The first Virgin Money Cyclone was held in Summer 2012.[85]
MBNA Corporation was a bank holding company and parent company of wholly owned subsidiary MBNA America Bank, N.A., headquartered in Wilmington, Delaware, prior to being acquired by Bank of America in 2006.
Clydesdale Bank is a trading name used by Clydesdale Bank plc for its retail banking operations in Scotland.
Northern Rock, formerly the Northern Rock Building Society, was a British bank. Based at Regent Centre in Newcastle upon Tyne, United Kingdom, Northern Rock was originally a building society. It demutualised and became Northern Rock bank in 1997, when it floated on the London Stock Exchange with the ticker symbol NRK.
Nationwide Building Society is the largest retail bank in the United Kingdom, and the world's largest building society, serving over 16 million members. It operates as a British mutual financial institution, meaning it is owned by and run for the benefit of its members. Nationwide is also the seventh largest cooperative financial institution globally. The Society's headquarters are located in Swindon, England.
Yorkshire Bank is a trading name used by Clydesdale Bank plc for its retail banking operations in England.
Alliance & Leicester plc was a British bank and former building society, formed by the merger in 1985 of the Alliance Building Society and the Leicester Building Society. The business demutualised in the middle of 1997, when it was floated on the London Stock Exchange. It was listed in the FTSE 250 Index, and had been listed in the FTSE 100 Index from April 1997 until June 2008.
Clydesdale Bank plc is a retail and commercial bank based in Scotland and now owned by Virgin Money UK. It was formed in Glasgow, Scotland, in 1838 and since 2019 mainly trades as Virgin Money.
Norwich & Peterborough Building Society (N&P) is a trading name of Yorkshire Building Society based in Bradford, West Yorkshire. Formed by the merger of the Norwich and Peterborough building societies in 1986, at the time of merger with YBS, it was the ninth largest building society in the United Kingdom, with assets in excess of £4.9 billion.
Banknotes of Scotland are the banknotes of the pound sterling that are issued by three Scottish retail banks and in circulation in Scotland. The Bank of Scotland, the oldest bank operating in the country, was the first bank in Europe to successfully print its own banknotes in 1695. The issuing of banknotes by retail banks in Scotland is subject to the Banking Act 2009, which repealed all earlier legislation under which banknote issuance was regulated, and the Scottish and Northern Ireland Banknote Regulations 2009. Currently, three retail banks are allowed to print notes for circulation in Scotland: Bank of Scotland, Royal Bank of Scotland, and Clydesdale Bank.
HBOS plc is a banking and insurance company in the United Kingdom, a wholly owned subsidiary of the Lloyds Banking Group, having been taken over in January 2009. It was the holding company for Bank of Scotland plc, which operated the Bank of Scotland and Halifax brands in the UK, as well as HBOS Australia and HBOS Insurance & Investment Group Limited, the group's insurance division.
In the period September 2007 to December 2009, during the Global Financial Crisis, the UK government intervened financially to support the UK banking sector, and four UK banks in particular.
In 2008 the Northern Rock bank was nationalised by the British government, due to financial problems caused by the subprime mortgage crisis. In 2010 the bank was split into two parts to aid the eventual sale of the bank back to the private sector.
Landmark Mortgages Limited, formerly Northern Rock plc and later NRAM plc, is a British asset holding and management company which was split away from the Northern Rock bank in 2010. It was publicly owned through the British Government's UK Asset Resolution following Northern Rock's nationalisation in 2008 until NRAM plc was sold to Cerberus Capital Management in 2016. The company is closed to new business.
Bank and Clients plc was a British private bank, which was formed by combining: Church House Trust, a retail bank founded in 1978 and Ocean Capital, a specialist corporate lender founded in 2002. B&C was based in London, England.
UK Asset Resolution (UKAR) is a British financial services holding company with headquarters in the West Yorkshire village of Crossflatts. It was established in October 2010 as a bad bank to hold the two run-off elements, Bradford & Bingley and NRAM plc, of the two nationalised banks in the wake of the financial crisis of 2007 and 2008.
Virgin Money is a financial services brand used by two independent brand-licensees worldwide from the Virgin Group. Virgin Money branded services are currently available in Australia and the United Kingdom. The brand formerly operated in South Africa and the United States.
B was a banking brand in the United Kingdom which operated between 2016 and 2019 as a trading division of Clydesdale Bank plc. B focused on app-based banking and computer learning of personal finances to help customers manage their money.
James Neilson Pettigrew who is currently the chairman of the AIB Group Plc, RBC Global Asset Management UK Ltd, and Scottish Ballet. Until recently, he was the chairman of Virgin Money & CYBG PLC, the owners of Clydesdale Bank, Yorkshire Bank and the digital app based current account provider, B. CYBG PLC was formed as part of the demerger with National Australia Bank in early 2016. From 2016-2019, he was Chairman of Scottish Financial Enterprise (SFE), the representative body for Scotland's financial services industry, from 2016-2019. He was also co-chair for the Financial Services Advisory Board (FiSAB) with the First Minister, and was on the advisory board of TheCityUK. and chaired Dundee Heritage Trust.
David Joseph Duffy is an Irish banker, and the chief executive officer (CEO) of Virgin Money UK.
References
↑ "Case Studies Heat Virgin Direct"(PDF). Target Four. Archived from the original(PDF) on 17 April 2012. Retrieved 17 January 2012. 3rd March 1995, in partnership with Norwich Union, Virgin Direct launched with its first product
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£1.827 billion (2023) [3] 
£345 million (2023) [3] 
