The centuries-old Clydesdale Bank name is set to disappear from Scotland’s High Street after its parent firm bought over Virgin Money in a £1.7 billion deal unveiled today.
The newly enlarged operation will be headquartered in Glasgow and is now being seen as a potential competitor to established giants such as Barclay’s and RBS with a newly created customer base of about 6 million.
The Scottish Government says the move could “strengthen” Scotland’s global banking reputation.
But the move has prompted job fears with plans earmarked to shed about 1,500 of the current 9,500 staff of the combined group.
It will trade under the Virgin Money brand as the Clydesdale name is gradually phased out over the coming years.
The takeover by the CYBG group, which owns the Clydesdale, will see its current chief executive David Duffy retain this role in the new group, as will CYBG chairman Jim Pettigrew.
“We’re going to become a competitor of scale,” Mr Duffy said yesterday.
READ MORE: Clydesdale owner agrees £1.7bn Virgin Money deal
“I think we have sufficient scale - the brands, the product and the technology. We can be agile enough to deliver a much better deal for the customer.”
CYBG, which also owns the Yorkshire Bank brand, said the terms of the agreement will see each Virgin Money share exchanged for 1.2125 shares in the new combined group, which will gradually be re-branded under the Virgin Money banner. Virgin Money was founded in 1995 and expanded its business substantially in 2011 when it bought the remnants of Northern Rock for about £747m.
A Scottish Government spokesman said: “The plan for the combined group to be headquartered in Glasgow will be welcome as well as the plan to build on the expertise and skills of both companies which will strengthen Scotland’s global reputation in the banking industry. It is also good to see the commitment that there is no intention to materially alter the overall size or nature of operations at the Glasgow headquarters.”
The prospect of job losses prompted concerns from Rob MacGregor, a national officer at Unite.
“It is vital that the skilled and experienced workforce are given assurances that branches and contact centres will not be closed leaving customers without their much valued access to local banking,” he said.
The prospect of bank branch closures was played down by CYBG’s finance chief Mr Smith, who said it was “early days” for any estimates.