Virgin Money becomes CYBG’s sole brand as it lays out plans to disrupt the status quo


CYBG is setting out its refreshed medium-term strategy at its Capital Markets Day, presenting the first strategic update on the new combined business following last year’s Virgin Money acquisition.

Plans include rebranding Clydesdale and Yorkshire Bank and digital brand B over the next two years to Virgin Money, as well as introducing new Virgin Money branded personal and business current accounts.

David Duffy, CEO, said: “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.”

New Virgin Money current account, launching in late 2019 – with Virgin-focused reward proposition in development

  • A full-service current account with leading digital capabilities and money management tools using CYBG’s award-winning B technology

  • Current account to evolve and include Virgin-focussed rewards programme with unique offers and personalised benefits only available to Virgin Money customers

  • Targeting top three position in CMA service quality ranking for personal customers

  • Aim to increase personal current account market share from c.2.5% to c.3.5%

New Virgin Money branded business bank – launching by summer 2020

  • Virgin Money to launch new business current account in first half of 2020 with leading online and mobile services for businesses, including digital account opening, money management tools, new fully automated lending and other services such as accountancy and tax management

  • Business banking available nationally, including in Virgin Money stores for the first time, significantly increasing the number of businesses that can be served

  • Digital services backed by expert advice available online, by phone, in branch – with network of over 300 Relationship Managers in 40 business banking centres supporting small and medium sized customers

  • Targeting top three position in CMA service quality ranking for business customers

  • Aim to increase business current account market share from c.3.5% to c.5%

Significant technology investment to create a better home buying experience

  • Mortgage customers – and brokers – to benefit from significant investment in technology across all mortgage channels:

    • new online and mobile Mortgage Hub for consumers, including new Artificial Intelligence mortgage assistant

    • leveraging APIs and wider technology capabilities to enhance broker platform and extend reach to thousands of new broker partners

  • Two new branded offerings for broker market – Virgin Money Everyday for mainstream lending and Virgin Money Expert for more complex lending offers – combining the strengths of both Virgin Money and CYBG in the mortgage market

  • Aim to maintain c.4% mortgage market share

Anticipated rebranding timetable for customers

Today’s announcement also confirms the Bank’s planned timetable for re-branding Clydesdale and Yorkshire Bank and digital brand B to Virgin Money.

The rebrand of the B digital bank to Virgin Money will begin in 2019, to complete in first half of 2020. This includes the rebranding of B’s flagship stores to Virgin Money[1]. Yorkshire Bank will begin rebrand changes in late 2019 and Clydesdale Bank will begin in the second half of 2020.  All Clydesdale and Yorkshire Bank rebranding is expected to be complete by the end of 2021.

The rebranding timetable is subject to the Bank receiving its FSMA Part VII approval enabling it to move to a single banking licence – this is expected to be achieved in October 2019.

In addition to this customer-related rebranding, the name of the CYBG holding company will change from CYBG to Virgin Money UK PLC in late 2019.

Speaking about the rebrand plans, David Duffy added: “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.”

Financial targets

Today’s announcement also sets out medium-term growth and financial targets to FY 2022, including:

  • Above market lending growth

  • High single digit growth in personal and business current accounts and linked savings balances

  • Total cost base reducing from <£950m in FY 2019 to <£780m by FY 2022, delivering a cost: income ratio in the mid 40%s by FY 2022

  • CET1 ratio of c.13%  

  • Reconfirmed annual £150m integration synergies from Virgin Money transaction by the end of FY 2022

  • Increased costs savings – c.£50m additional annual savings from further transformation and digitisation savings by the end of FY 2022 – giving £200m total annual savings by FY 2022

  • Statutory Return on Tangible Equity (RoTE) of at least 12% by FY 2022

  • Progressive and sustainable ordinary dividends – c.50% pay-out ratio over time