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Former AIB CEO David Duffy

Former AIB boss in €1.7bn takeover deal for Virgin Money

Former AIB CEO David Duffy

Former AIB boss David Duffy’s CYBG has sealed a £1.7bn (€1.9bn) deal to buy Virgin Money that will catapult the lender to the top of Britain’s emerging class of so-called challenger banks.

The all-stock transaction will create a bank with about six million customers.

Mr Duffy headed State-owned AIB here between 2011 and 2015, and left to become CEO of CYBG, the owner of Clydesdale and Yorkshire banks. He’s since led the spin-out of CYBG from former parent National Australia Bank (NAB) and its subsequent stock market listing. Earlier this year, Mr Duffy was tapped by the UK government as a financial technology (fintech) champion, advocating for the sector domestically and abroad.

The purchase of the Richard Branson-backed Virgin Money gives CYBG greater scale, potential cost savings and access to the firm’s presence on the UK high street.

In what is effectively a merger, Virgin Money shareholders including Mr Branson, will own around 40pc of the combined group. CYBG’s Clydesdale and Yorkshire brands will cut 1,500 jobs and rebrand their branches as Virgin Money. Some branches will close where the businesses overlap.

The deal adds to a number of transactions to combine smaller banks in the UK as they seek to raise funds and steal business from top lenders. The combined company will have around £80bn of assets, according to a statement Monday.

Virgin Money’s shares rose 2.4pc to 363.4 pence after the deal was announced. The stock had gained about 14pc since CYBG initially made an offer in May. It slightly sweetened its all-stock proposal earlier this month by offering Virgin Money shareholders more of the merged company.

CYBG chairman Jim Pettigrew, CEO David Duffy and CFO Ian Smith will retain their current positions in the new group, according to the statement.

Jayne-Anne Gadhia, CEO of Virgin Money, will stay on as an adviser.

The combination looks like a “cracking deal” for CYBG shareholders, Investec analyst Ian Gordon wrote in emailed comments. (Additional reporting Bloomberg)


Irish Independent


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