CYBG will adopt Virgin Money brand to ‘disrupt the status quo’
CYBG, the owner of Yorkshire Bank and Clydesdale Bank, has this morning announced the entire business is to adopt the Virgin Money name by the end of 2021; as the CEO reveals plans to “disrupt the status quo.”
The announcement this morning comes as the listed business updated the markets on progress since its £1.7bn takeover of Virgin Money last year. The deal was first announced on 18 June last year and received shareholder and regulatory approval through the year, before completing in October.
It will now undertake a re-branding of Clydesdale and Yorkshire Bank and its digital brand, B. The CYBG PLC name will change to Virgin Money UK PLC in late 2019, with the entire business using Virgin Money brand by end of 2021. Yorkshire Bank will begin re-brand changes in late 2019 and Clydesdale Bank will begin in the second half of 2020.
The bank said its re-branding timetable was subject to receiving approval enabling it to move to a single banking licence, which is expects to achieve in October 2019.
CEO David Duffy said: “Our plan for the new Virgin Money means that for the first time there will be a major disruptor that can serve the whole of the UK, combining the very best technology with a great personal service and an absolute focus on being a customer champion. We’re looking to reinvent the role a bank plays in people’s lives.
“Clydesdale and Yorkshire Bank have been serving customers in Scotland and the North of England for over 175 years. Both brands are a by-word for reliability and trust and we understand the emotional attachment customers and local communities have towards them.
“The decision to retire brand names with such long and proud histories is not an easy one. Marrying the values and expertise of these heritage brands with the Virgin Money brand will allow us to realise efficiencies and grow our business throughout the UK.”
CYBG also announced it was targeting an additional £50m of annual net cost savings on top of existing £150m annual savings from the Virgin Money transaction. It said that this would give the business £200m total annual net cost savings by FY 2022.
CYBG added that the first full Virgin Money personal current account would launch in late 2019, through which it aims to achieve a 40% increase in market-share. It will launch a business bank by summer 2020 and invest in new technology in mortgages.
The bank also announced its medium-term growth and financial targets to FY 2022, including high single digit growth in Personal and Business current accounts and linked savings balances; above market lending growth and “progressive and sustainable ordinary dividends” with a 50% pay-out ratio over time.
CYBG said it was also looking to reduce its total cost base from <£950m in FY 2019 to <£780m by FY 2022.
Duffy added: “Banking is changing at an unprecedented rate. Consumers are using new technology in every part of their lives. With amazing customer experiences available in other industries, they are rightly demanding so much more from their banks.
“We have a clear ambition to disrupt the status quo with the new Virgin Money. The new Group combines the iconic Virgin brand, with its distinctive and brilliant customer experience, with CYBG’s technology, product expertise and know-how. We believe we have the winning formula that will create a new force in consumer and business banking.
“Our new financial targets will deliver a significantly more efficient and profitable business with strong and sustainable returns for our shareholders. Despite the ongoing Brexit headwinds and continued competitive pressures, the strength of the combination gives us every confidence we will deliver on our targets.”
