Virgin Money boss says CYBG deal shows UK banking sector has recovered

Jayne-Anne Gadhia said that the past decade has given industry challengers like Virgin Money a chance to improve their customer offerings and compete with the British bank majors, which were trying to pick up the pieces following the banking crash.

The advent of the CYBG-Virgin deal proves that the banking industry is now on a stable footing, she said in an interview with the Press Association.

“It shows how strong it is, really. You know, we’ve got two very successful organisations with limited overlap in terms of products able to contemplate joining forces and becoming more than just a challenger bank,” she said.

“A combination between CYBG and Virgin Money will create the sixth biggest bank in the UK, and that has to be a stable competitor for the future.

“So I do think that means over the 10-year period we’ve created more competition and more robust systems, I genuinely believe that.”

CYBG - the owner of the Clydesdale Bank, Yorkshire Bank and B brands - earlier this year agreed to acquire Virgin Money in a deal valuing its target at around £1.7bn.

It is one of the biggest for the banking industry since the financial crisis, though other recent deals have seen smaller lender Aldermore bought by South Africa’s FirstRand in a £1.1bn takeover, and Shawbrook, taken over by private equity firms last year in an £850m deal.

But the environment is not necessarily ripe for a raft of consolidation, the chief executive said, insisting that competition is strong, not least thanks to upstarts like digital bank Monzo.

“I’d say the smaller, new banks are doing their bit for competition, too,” she said.