Virgin Money has agreed to buy Northern Rock. Completion of the transaction is expected on 1 January 2012.
Combined with Virgin Money’s existing business of three million customers, the enlarged Group will have four million customers, will be strongly capitalised and will be highly liquid. Sir David Clementi will be chairman of the combined business and Jayne-Anne Gadhia will be its chief executive officer. The combined business will operate under the Virgin Money brand.
The acquisition, upon completion, includes:
- 75 Northern Rock branches
- One million customers
- c.£14 billion mortgage book
- c.£16 billion retail deposit book
- c.2,100 employees.
Jayne-Anne Gadhia, chief executive officer at Virgin Money, commented: “We plan to create a major new competitor in UK retail banking as we bring together Northern Rock and Virgin Money at the beginning of 2012. The two businesses complement each other well and together they will create a strong bank with over 4 million customers. It is the outstanding fit between the two businesses that will allow us to create a strong, stable, growing and profitable business for the future. We are aiming to build a true banking alternative for the UK consumer, one centred around our ambition to make everyone better off”.
Sir David Clementi, chairman of Virgin Money said: “Returning Northern Rock to private ownership is an important step in rebuilding the UK banking sector, as well as an outstanding opportunity to enhance competition and financial stability whilst protecting jobs and the economy in the North East of England. It is our intention to build a significant banking competitor in the UK and to take that business to the public markets within five years through an IPO”.
Sir Richard Branson, founder of the Virgin Group said: “Banking in the UK needs some fresh ideas and an injection of new competition. I’m delighted we will get the chance to work with the loyal staff of Northern Rock to create a new force in the market. Virgin has a history of entering new sectors to improve service and provide value for customers. We plan to do the same in banking”.
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