DEBBIE Crosbie, one of CYBG’s most senior executives, was in ebullient form as she discussed the merits of the bank’s all-share £1.7 billion acquisition of Virgin Money, confirmed yesterday.
CYBG has confidently declared that its move will create a new force on the UK’s banking scene, a bank capable of providing a genuine challenge to the high street giants by virtue of its scale, customer base and the breadth of its product offer. It also underlined the importance of the Virgin Money brand name to its aspirations, with Ms Crosbie highlighting its resonance with customers and association with entrepreneurship as key attractions to the deal.
Investors in Virgin appear to have been broadly optimistic about the merger. The share price steadily climbed after CYBG first made its approach and then after an improved bid was tabled, albeit the stock slipped back yesterday. The price has gone up from 343.3p to 347.3p in that time. Shares in CYBG have recovered some of their poise in recent weeks too, having initially fallen after the deal was first mooted.
However, not all aspects of the deal will necessarily be viewed positively. While Ms Crosbie was confident the anticipated 1,500 redundancies arising from cost-saving measures will come through “natural attrition”, some managers at the group may well be worried about their futures. And, while it may seem more superficial, the revelation that the Clydesdale Bank will gradually be phased out may disquiet Scottish customers. Brand heritage is not easy to come by, especially when it has been built up over 180 years.
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