Nationwide to buy Virgin Money in £2.9 billion deal

Nationwide has announced its intention to acquire Virgin Money in a deal worth £2.9 billion.

The aquisition would create a combined group with total assets of approximately £366.3 billion and total lending and advances of approximately £283.5 billion, representing the second largest provider of mortgages and savings in the UK.

Virgin Money is the UK's sixth largest retail bank by total assets with a customer base of approximately 6.6 million and total lending of £72.8 billion, comprising a mortgage portfolio of approximately £57.1 billion.

Nationwide plans to integrate Virgin Money gradually over several years into the Nationwide group. In the medium term, Virgin Money would continue to operate as a separate entity within the Nationwide group, with a separate board of directors and a separate banking licence.

Nationwide plans to retain the 'Virgin Money' brand over a six-year period from completion, after which it would rebrand as Nationwide.

Chairman of Nationwide Building Society, Kevin Parry, said: "A combination with Virgin Money would accelerate Nationwide's strategy and create a stronger, and more diverse, modern mutual.

"The combination would increase Nationwide's scale and financial strength, put us in a stronger position to continue to provide Fairer Share Payments to eligible Nationwide members, and offer rates for mortgages and savings that are, on average, better than the market average."

CEO of Nationwide, Debbie Crosbie, commented: "Importantly, Nationwide will remain a building society, and a combined group would bring the benefits of fairer banking and mutual ownership to more people in the UK, including our continuing commitment to retain existing branches, as part of our 'Branch Promise' and leading levels of customer service.

"We believe the combination would create a stronger and more diverse business that will be better placed to deliver value to our members and customers, both now and in the future."

Chairman of Virgin Money, David Bennett, said: "The Board of Virgin Money is pleased that Nationwide recognises the considerable strengths and opportunities that exist across our business, with the potential acquisition delivering attractive value for our shareholders. We are confident that a combination would support an exciting new chapter for Virgin Money to benefit from Nationwide's scale and ambition."

CEO Virgin Money, David Duffy, added: "This potential transaction with Nationwide represents an exciting opportunity to build on the significant progress we have made in becoming the only new Tier 1 bank in recent history. The combined scale and strength would expand our customer offering and complete our journey in the banking sector as a national competitor."