The owner of Clydesdale Bank and Yorkshire Bank, CYBG, has agreed to buy Virgin Money for £1.7bn, which is likely to lead to more than 1,500 job losses.
The deal will see all of Yorkshire Bank, established in Halifax in 1859, and Clydesdale Bank’s retail customers move to the Virgin Money brand.
The firms said they recognise “that there will be a loss of jobs” as a result of the takeover, likely to number around 1,500.
The owner of the Clydesdale Bank, Yorkshire Bank and B brands said the terms of the agreement will see each Virgin Money share exchanged for 1.2125 shares in the new combined group.
It is not clear at this stage whether the cuts will affect Virgin Money staff, CYBG staff or both.
The bulk of the cuts will affect senior management positions, as CYBG has said there is “very little in overlap” in customer-facing roles
CYBG’s David Duffy will stay on as chief executive, leaving Virgin Money boss Jayne-Anne Gadhia to serve in a consultancy role as his senior adviser.
“As a result of the significant operational overlap between CYBG and Virgin Money, the combined group will be able to reduce the duplication of roles, leading to a decrease in the total number of FTEs (full-time employees).
“It is currently expected that the total number of FTEs of the combined group, being approximately 9,500 FTEs, will reduce by approximately 16%, some of which will take place via natural attrition.”
Ms Gadhia said she had “obtained assurances from CYBG regarding our employees” as well as its Gosforth headquarters but did not provide further details.
It will be the UK’s sixth-largest bank, with about six million customers, but 1,500 jobs are likely to go.