High street bank with 6.6million customers to be sold to rival in £2.9billion deal – what it means for your money
VIRGIN Money has agreed to a takeover by Nationwide Building Society in a £2.9billion deal, the lenders have announced.
Nationwide said the merger would enable the company to provide members with a wider range of products and services.
Virgin Money has around 6.6million customers in the UK and 91 branches, while Nationwide has 16million members and 686 branches.
This is the largest deal ever made by a female banker after Nationwide chief executive Debbie Crosbie announced the planned acquisition this morning.
It's important to note there's no immediate change for customers.
While the details are yet to be finalised, the deal would allow the two brands to run as separate entities, with the Virgin Money brand retained for six years before rebranding as Nationwide.
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No branch closures are expected to be announced.
Nationwide has also confirmed there will be no changes to deposits and savings up to £85,000 will remain protected by the Financial Services Compensation Scheme (FSCS).
Plus, the bank is continuing its "Branch Promise" keeping all of its branches open at least until the start of 2026.
Should the takeover proceed it would create the country's second largest mortgage and savings group.
Nationwide would overtake Natwest, putting them just behind Lloyds as the largest group lender.
Any sale will be monitored closely by the banking regulator.
He added: "Borrowers have nothing to worry about and their mortgage will continue as normal.
"In fact both brands are set to continue for some time to come, so the market should continue to benefit from differentiated ranges in the near term.”
Both parties have confirmed the deal was mutual and will be funded through its existing cash resources.
Nationwide said it does not intend to make any material changes to the size of Virgin Money’s workforce “in the near term”.
Virgin Money employs around 7,300 people.
Nationwide was presented with an all-cash offer of 220p per Virgin Money share last Wednesday which represented a premium of 30% to Virgin Money's share price.
The companies added a planned 2p share dividend payout that would come on top of the original payout.
The companies would have an estimated lending and advances of around £283.5billion, combined the group would have total assets of £366billion.
Nationwide chief executive Debbie Crosbie said: "Nationwide will remain a building society, and a combined group would bring the benefits of fairer banking and mutual ownership to more people in the UK, including our continuing commitment to retain existing branches, as part of our 'Branch Promise' and leading levels of customer service.
RECENT ACQUISITIONS
Just last month we saw a similar deal made between Barclays and Tesco Bank.
Tesco Bank which has over five million customers was sold to Barclays in an agreed deal that would include acquiring almost 3,000 staff.
It comes after Sainsbury's announced it will wind down its banking division - known as Sainsbury's Bank - as part of plans to focus on retail.
Last summer Sainsbury's Bank offloaded its £479million mortgage book to Co-op Bank.
Elsewhere, struggling Metro Bank announced it would axe 800 jobs and review its opening hours in a new cost-cutting drive.
The high street bank is considering cutting its seven-day branch opening hours as it attempts to claw back costs.
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