Yorkshire Bank warn on potential future job cuts and confirm the brand to vanish by end of the year

Clydesdale and Yorkshire Bank owner CYBG warned of further potential job cuts as it hiked cost savings from the Virgin Money takeover and revealed plans to call time on its 175-year-old brands within two years.

The group said it was rolling out further automation within its branches and operations under plans to increase annual cost savings by another £50 million to £200 million by 2022.

CYBG warned that the extra cost savings could lead to further potential job losses on top of around 1,500 already set to go as a result of the Virgin Money deal.

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On the cost savings, a spokesman said the additional £50 million is likely to come from a further push towards automation and its technology transformation.

CYBG CEO David Duffy Pic Peter Devlin

He said: “It might include some further role reductions and automation in the branch network and other operational areas.

“We will continue to work through the details and will inform our colleagues first of any implications.”

The group has already warned that around 16% of the combined workforce - about 1,500 jobs - will go following the Virgin Money deal, although some of these are expected to be lost through natural staff turnover.

The new business, formed after the merger last year, plans to launch its first Virgin Money business current account before summer 2020 as part of new Virgin Money branded SME business bank, aiming for a circa 40% increase in market-share to five per cent of the UK total.

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Yorkshire Bank completes Virgin Money takeover

The new business bank account will span 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.

The firm plans to make its servives available nationally, including in Virgin Money stores for the first time.

Its boss said that the changes were part of a clear plan to disrupt the UK banking sector, and that the Virgin Money brand was the means to make this happen.

Virgin Money also wants plans on targeting an additional £50m of annual net cost savings on top of existing £150m annual savings from Virgin Money transaction – giving £200m total annual net cost savings by 2022.

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.

These include the rebranding of Clydesdale and Yorkshire Bank and digital brand B over the next two years to Virgin Money, a move which will see the Yorkshire Bank brand vanish from British business forever.

CEO David Duffy said that the banking industry was changing at an “unprecedented rate” and that rapid change was needed.

He said: “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.”