Nationwide completes Virgin Money takeover combining two of Britain's largest banking groups

The purchase of the bank by the building society will pave the way for the creation of a combined group with around 24.5 million customers, more than 25,000 staff and nearly 700 branches, bringing together Britain’s fifth and sixth largest retail lenders.

But combining two of the country’s largest lenders is a process that is expected to take several years.

It will eventually see the Virgin Money brand disappear from UK high streets, but it will not happen automatically.

The two brands will continue to exist on UK high streets for between four and six years, before Virgin Money is fully absorbed by Nationwide and customers are switched over, with with Nationwide planning to rebrand the Virgin Money business as Nationwide.

As a building society, Nationwide said it was not required to seek members’ permission for such a takeover.

This decision was met with some criticism and a small group of members organised a campaign in the hope of demanding a vote.

The previously FTSE 250-listed Virgin Money was de-listed from the London stock market on Tuesday as a result of it being taken private.

The bank was founded by billionaire businessman Sir Richard Branson in 1995.

Sir Richard’s Virgin Group was thought to be in line to net more than £400 million from the sale, as he still had a 14.5 per cent stake in the bank.

Speaking on the deal, Debbie Crosbie, chief executive of Nationwide, said: “Nationwide is now a stronger mutual and able to deliver even greater value through our unique branch promise, leading customer satisfaction, and competitive savings and lending rates.

“All Virgin Money profits will be retained for the benefit of customers and, for the first time in the UK, a full service business bank will be part of a large and modern mutual.”

A mutual refers to Nationwide’s structure whereby it is owned by members, rather than shareholders like most UK banks.

The news comes after Nationwide’s takeover of Virgin Money was approved by a judge last week.

Lawyers for the lenders secured the sanctioning of the deal at a specialist companies court in London on Friday.

The building society agreed to the takeover of its London-listed rival in March.

Nationwide struck the takeover deal with a 220p-a-share offer for Virgin Money, including a 2p-per-share dividend payout.

At the end of a short hearing, Judge Sir Anthony Mann said he was “satisfied” that legal requirements had been complied with.

The court heard that 90 per cent of shareholders who voted at a meeting in May had backed the scheme.

“It’s obviously a sensible scheme with financial benefits,” Sir Anthony said, adding: “There is no apparent blot on this scheme.”

He continued: “I can see no reason not to sanction the scheme and in my discretion I will do so.”

Last month, the lenders told the stock market that the Financial Conduct Authority and the Bank of England’s Prudential Regulation Authority had both approved the takeover.