The story
Founded by Richard Branson in 1995.1
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. In 2000, virginmoney.com was launched as a price comparison website. RBS bought out Virgin's stake in the One Account joint venture in 2001.
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.
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."
In October 2009, Virgin Money applied to the Financial Services Authority for a full banking licence. In February 2011 they announced their intention to lease a large office in Edinburgh.
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. On 26 January the deal was declared unconditional.
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. 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. 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.
Acquisition of Northern Rock plc
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. 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". The initial bid was not successful, and Northern Rock was then nationalised.
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 £747 million, with other potential payments of up to £280 million over the next few years. 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. Both Abu Dhabi-based Stanhope Investments and Branson's Virgin Group invested £50 million in the Northern Rock deal. In 2014, Virgin Money repaid a further £154.5 million that it had received as part of the refinancing package.
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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. 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.
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. On 23 July it was announced that Virgin would also be acquiring £465 million worth of mortgage assets from Northern Rock (Asset Management). On 12 October, Northern Rock plc was renamed Virgin Money plc and the Northern Rock brand was phased out.
In January 2013, Virgin agreed to buy £1 billion 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. A further £363 million credit card asset portfolio was purchased from MBNA in 2014.
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 £150 million which would go towards expanding and enabling it to continue to hire and maintain its existing base of top staff members. A successful offer led to a final payment of £50 million to the UK Government with respect to the company's IPO following the purchase of Northern Rock.
Church House Trust Limited was sold to Ocean Industries S.A. for £13 million on 30 November 2014. WL Ross & Co reduced its stake in the company to 23.3% in April 2015; Stanhope reduced its stake to 1%. WL Ross & Co sold its remaining stake in November 2016.
As of 2017, the business had 3.34 million customers.
Acquisition by CYBG plc
National Australia Bank acquired Clydesdale Bank in 1987 and Yorkshire Bank in 1995. Fred Goodwin, an accountant working for Touche Ross, worked on the acquisition of Clydesdale Bank. In 1995 Goodwin, with little direct banking experience, was appointed deputy CEO of the Clydesdale Bank. 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.
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. Clydesdale Bank and Yorkshire Bank were demerged and placed in a separate holding company, CYBG plc (Clydesdale and Yorkshire Banking Group), 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.
On 7 May 2018, it was reported that CYBG plc had made an all-share offer of £1.7bn to acquire Virgin Money UK. 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.
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. 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.
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.
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. In preparation for re-branding, the existing Virgin Money plc was merged into the existing Clydesdale Bank plc on 21 October 2019.
The group's name was changed from CYBG plc to Virgin Money UK plc on 31 October 2019.
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.
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%).
Although the Clydesdale brand has been phased out the name continues to appear on the Scottish banknotes issued by the bank.
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 the bank's parent company, Virgin Money UK plc, for £2.9 billion. 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. 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. Nationwide aims to not make any material changes to Virgin Money's 7,300 employees "in the near term".
Virgin Money's shareholders approved the deal on 22 May and it is expected to complete by the end of the year. 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. On 19 July, the Competition and Markets Authority approved the transaction. 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. 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. The transfer of Virgin Money's business to Nationwide Building Society was completed on 2 April 2026, with the Virgin Money brand continuing as a trading name of Nationwide Building Society.
From Wikipedia’s article on Virgin Money UK, shared under CC BY-SA 4.0.5