SHARES in CYBG rose six per cent after the firm passed a milestone on the road to scrapping the Clydesdale Bank brand following its takeover of Virgin Money.

CYBG told investors it had completed the legal formality that will allow the group to fold its Clydesdale and Yorkshire bank operations into an entity that will trade under the Virgin Money name.

The Clydesdale will be missed

“This is a significant milestone for the Group as it means that we can now begin the integration of our customer propositions,” said CYBG yesterday, after completing the formal court-approved transfer process.

This gave it the all clear to start a rebranding process that will see the Clydesdale and Yorkshire Bank names phased out by the end of 2021.

The group said the completion of the Part VII transfer would also allow it to combine the back office operations of the three banks, in support of its drive to slash costs.

“The transition to the new Virgin Money is now gathering momentum” said CYBG.

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Led by chief executive David Duffy, directors of CYBG reckon the combination of the three businesses it owns under the Virgin Money brand will help it mount a big challenge to the dominance of big fish such as RBS and Bank of Scotland owner Lloyds Banking Group.

However, sector watchers in Scotland are saddened by the prospect of the disappearance of the Clydesdale name. This has been a fixture of the Scottish scene since the bank was formed in 1838.

There is unease about what the aggressive cost-cutting planned by the group will mean for the workforce in Scotland.

In June CYBG targeted an additional £50 million of annual net cost savings stemming from its combination with Virgin Money by the end of 2022.

CYBG previously warned the £1.7 billion takeover agreed in June last year would lead to around 1,500 job losses, 16 per cent of the combined workforce. It planned initially to achieve annual cost savings of £150m.

Glasgow bank withdraws fully from four Scottish towns

In September CYBG said it would rationalise its corporate property portfolio over the next two years, to focus on key locations in Glasgow and Gosforth.

The group said Virgin Money’s St Andrew Square office in Edinburgh would close by the end of 2019 but it would retain a strong presence in the city.

In May the group announced plans to close five branches in Scotland, putting 25 jobs at risk.

The latest closures have left the group with 62 Clydesdale branches in Scotland, meaning the network north of the Border has nearly halved since 2016. CYBG has five Virgin Money branches in Scotland.

The group employs over 5,000 people in Scotland, including 3,500 in Glasgow and 1,000 in Clydebank.

CYBG shares closed up 7.8p at 141p. The listed entity will be renamed Virgin Money from October 31.

Meanwhile, Prudential has completed the demerger of its UK business, as M&G, from the overseas operations it has decided to focus on. M&G runs long term savings and asset management operations and employs around 1,700 people in Scotland.