Virgin Money UK plc

Last updated

Virgin Money UK plc
FormerlyCYBG plc (1 October 2015 – 30 October 2019)
Company typePublic
LSE:  VMUK
ASX:  VUK
FTSE 250 component
S&P/ASX 200 component
Industry Banking, Financial services
Founded1 October 2015;8 years ago (1 October 2015)
Headquarters Newcastle Upon Tyne, England, UK (Registered office)
Glasgow, Scotland, UK (Head office)
Key people
 James Pettigrew
(Chairman)
David Duffy
(CEO)
Services Retail banking
SME banking
RevenueIncrease2.svg £1.827 billion (2023) [1]
Decrease2.svg £345 million (2023) [1]
Decrease2.svg £246 million (2023) [1]
Total assets Decrease2.svg £91.786 billion (2023) [1]
Total equity Decrease2.svg £5.607 billion (2023) [1]
Number of employees
7,166 (2023) [1]
Subsidiaries Clydesdale Bank plc
Website virginmoneyukplc.com

Virgin Money UK plc, previously known as CYBG plc, is a holding company that owns Clydesdale Bank plc, which in turn trades as Clydesdale Bank, Yorkshire Bank and Virgin Money in the United Kingdom. It was formed as CYBG plc by National Australia Bank (NAB) in February 2016, in advance of the divestment of its UK business through a stock market flotation. It is listed on the London Stock Exchange and Australian Securities Exchange; it is also a constituent of the FTSE 250 Index.

Contents

History

Formation of CYBG plc

National Australia Bank acquired Clydesdale Bank in 1987 and Yorkshire Bank in 1995. [2] Fred Goodwin, an accountant working for Touche Ross, worked on the acquisition of Clydesdale Bank. [2] In 1995 Goodwin, with little direct banking experience, was appointed deputy CEO of the Clydesdale Bank. [2] 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. [3]

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. [4] Clydesdale Bank and Yorkshire Bank were demerged and placed in a separate holding company, CYBG plc (Clydesdale and Yorkshire Banking Group [5] ), 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. [6]

Acquisition of Virgin Money

On 7 May 2018 it was reported that CYBG plc had made a £1.7bn all share offer to acquire Virgin Money plc. [7] On 18 June 2018 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 the Virgin Money brand over the following three years. [8] The acquisition of Virgin Money plc was completed on 15 October 2018. [9] The assets of Virgin Money plc were legally merged into Clydesdale Bank plc on 21 October 2019. [10]

Rebrand to Virgin Money UK plc

The group's name was changed from CYBG plc to Virgin Money UK plc on 31 October 2019. [11] [12]

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. [13]

As at 21 November 2023 significant shareholders of the business included Virgin Group (14%), Firetrail Investments Pty Limited (5%), BlackRock (5%), Perpetual Limited (4%), Investors Mutual Limited (4%) and Schroders (3%). [14]

Although the Clydesdale brand has been phased out the name continues to appear on the Scottish banknotes issued by the bank. [15]

Proposed acquisition by Nationwide

On 7 March 2024 Nationwide Building Society, the UK's largest building society, announced that they had made an offer to buy Virgin Money UK plc for £2.9 billion. [16] 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. [16] 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. [16] Nationwide aims to not make any material changes to Virgin Money's 7,300 employees "in the near term". [16]

Virgin Money's shareholders approved the deal on 22 May and it is expected to complete by the end of the year. [17] 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. [18]

Operations

The registered office is in Newcastle upon Tyne, where the Virgin Money UK division is headquartered. [19] The B, Clydesdale Bank, and Yorkshire Bank brands are in the process of being phased out in favour of the Virgin Money brand. [20]

See also

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David Joseph Duffy is an Irish banker, and the chief executive officer (CEO) of Virgin Money.

References

  1. 1 2 3 4 5 6 "Annual Report 2023" (PDF). Virgin Money UK. Retrieved 13 February 2024.
  2. 1 2 3 "The sorry history of the near-destruction of investment banking at RBS". UK Business Insider. 6 March 2015. Retrieved 17 April 2017.
  3. ↑ "Employer profile: Yorkshire and Clydesdale Banks". Employee Benefits. 5 May 2009. Retrieved 17 April 2017.
  4. ↑ "NAB bank flags Clydesdale and Yorkshire sale in UK exit". BBC News. 30 October 2014. Retrieved 5 November 2014.
  5. ↑ "Virgin Money PLC". RoS Knowledge Base. Retrieved 30 January 2024.
  6. ↑ Taverner, Charlie; Fedor, Lauren (3 February 2016). "Clydesdale Bank share price trades above opening offer as conditional trading starts on IPO after 24-hour delay". City A.M. Retrieved 7 February 2016.
  7. ↑ Mines, Josh (7 May 2018). "Richard Branson-backed Virgin Money receives takeover bid from Clydesdale and Yorkshire Bank owner CYBG". City AM. Retrieved 8 May 2018.
  8. ↑ "Virgin Money bought by CYBG for £1.7bn". BBC News. 18 June 2018.
  9. ↑ "CYBG completes €1.9bn takeover of Virgin Money". The Independent. 15 October 2018. Retrieved 15 October 2018.
  10. ↑ "Clydesdale and Virgin Money are becoming one bank". Virgin Money UK.
  11. ↑ "Virgin Money brand relaunch to commence following completion of single banking license for the combined group". CYBG.
  12. ↑ "CYBG plc re-brands as Virgin Money UK plc". Virgin Money UK plc.
  13. ↑ "Virgin Money almost doubles CEO's pay despite £385m PPI charge". The Guardian. 28 November 2019. Retrieved 24 January 2020.
  14. ↑ "Virgin Money Annual Report & Accounts 2023" (PDF). Virgin Money UK plc. Retrieved 18 May 2024.
  15. ↑ "Buying yon bonnie banks". BBC News. 21 March 2024. Retrieved 22 March 2024.
  16. 1 2 3 4 "Nationwide strikes deal to buy Virgin Money for £2.9bn". BBC News. 7 March 2024. Retrieved 9 March 2024.
  17. ↑ Makortoff, Kalyeena (22 May 2024). "Virgin Money shareholders vote for Nationwide takeover by big majority". The Guardian. Retrieved 24 May 2024.
  18. ↑ "Nationwide-Virgin merger faces competition probe". BBC News. 31 May 2024. Retrieved 2 June 2024.
  19. ↑ "Contact us". CYBG. Retrieved 17 April 2017.
  20. ↑ "Clydesdale and Yorkshire banks re-brand to Virgin Money amid plans for new megastores". Business Live. 21 October 2019. Retrieved 17 February 2022.
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