A court hearing late last week gave the all-clear for CYBG to complete its acquisition of Virgin Money for $2.24 billion, finalizing one of the largest bank mergers since the financial crisis, according to reports in Independent.ie on Monday (Oct. 15).
The final approval followed clearance from the U.K. Financial Conduct Authority (FCA) and the Prudential Regulation Authority, as well as shareholders’ votes in favor of the deal. Together, CYBG and Virgin Money will service an estimated six million customers.
The combined entity will rebrand as Virgin Money, and CYBG’s David Duffy will remain chief executive. Jayne-Anne Gadhia, Virgin Money’s head, will stay on as Duffy’s senior advisor.
The merger creates the U.K.’s sixth largest bank, according to reports. Customers will migrate to the merged Virgin Money over the course of three years, and while the company will initially have an estimated 9,500 employees, CYBG said it plans to remove about one-sixth of that headcount.
“Today marks an historic milestone for CYBG and Virgin Money, creating the first true national competitor to the status quo in U.K. banking, with a clear ambition to provide customers with the best service in the U.K.,” said Duffy in a statement.
He added that the combined company will be focused on customer experience as it moves through its rebranding strategy in the next three years.
“This is a unique combination that will enable us to compete with the large incumbent banks,” Duffy said.
CYBG, which owns the Yorkshire and Clydesdale brand, moved to quell some consumer concerns about the transition, noting that there will not be an immediate switch for consumers.
The new Virgin Money will also focus on strengthening its small business services. Earlier this year, Virgin Money introduced enhanced SMB services, including its small business deposit account; the merger will continue that effort to enhance digital banking for the small business community.
“The Virgin Money brand has potential in the [SMB] market, and testing with existing Clydesdale and Yorkshire Bank customers is underway to evaluate the Virgin Money brand affinity with [SMB] customers and the appropriate timescale for any [SMB] rebranding exercise,” CYBG said in a statement.
CYBG first announced in May that it had reached an agreement to acquire Virgin Money.