CBYG’s £1.7bn takeover of Virgin Money result in 1, 500 job losses

The  1.7bn Virgin Money takeover deal by Clydesdale and Yorkshire Bank Group (CYBG), creates UK’s sixth-largest bank with 6 million personal and small business customers with total lending of £70bn and 9, 500 staff, risking over 1,5 00 jobs, mainly senior management posts.

The bank expects to make £120m of annual savings by 2021 by reducing the overlap between their operations with a 16 per cent reduction in the combined group’s workforce. There is, however, a plan to retain Virgin Money’s head office in Gosforth, Newcastle, for at least three years. Anne Gadhia, who has led the bank for more than 10 years, will become a senior adviser to the CYBG boss David Duffy who will take the reins of the combined company.

CYBG is paying 1.2125 new shares in exchange for each Virgin Money share and based on last Friday’s closing price of 306p, Virgin Money share will be 371p.

Virgin Money founded in 1995 by Sir Richard Branson, who owns a 35 per cent stake, will make a good profit-seven years after he led a controversial £747m buyout of Northern Rock after its rescue by the taxpayer.

The rebranding will cost £60m, CYBG has agreed to license the Virgin Money brand for £12m a year initially going up to £15m in the fourth year.