Nationwide completes Virgin Money acquisition – here’s what’s changing

Nationwide Building Society has confirmed it has completed its controversial takeover of Virgin Money.

Britain’s largest building society informed its members by email today that it has now completed the acquisition of Virgin Money.

Nationwide announced it had agreed a £2.9bn deal to take over Virgin Money in March.

Nationwide members were unable to vote on the acquisition. The building society rejected demands for a vote of its members, claiming it was not legally necessary and would be impossible to carry out in a short period of time due to its huge membership base.

Virgin shareholders voted 89 per cent in favor of accepting the acquisition and the Virgin Money name will phase out by 2028.

Virgin chief executive David Duffy has resigned and will be replaced by chief financial officer Chris Rhodes. It has more than 6 million customers, including those with savings and mortgages.

In the deal, Nationwide offered a 38 per cent premium to Virgin Money’s closing price on March 6, the day before its disclosure.

This is what will change now that the Virgin Money acquisition has been completed.

Branches

Virgin Money branches are now included in Nationwide’s branch commitment, Nationwide says.

This means that wherever there is a Nationwide or Virgin Money branch, they will remain there until at least early 2028, even where there is a Nationwide branch and a Virgin Money branch nearby.

Customers will still not be able to use Virgin Money branches for Nationwide transactions.

Nationwide said it hopes to expand the range of services it offers over time, but did not give a time frame.

The mutual also said customers will benefit from Virgin Money’s expertise in personal loans and credit cards, as well as commercial banking and club and society accounts.

savings and savings books

Customers who have savings in both Nationwide and Virgin Money will be protected under the maximum protection offered by the Financial Services Compensation Plan in each of their Nationwide and Virgin Money accounts.

This is because Virgin Money has its own banking licence, owned by Clydesdale Bank. Customers with savings in both Nationwide and Virgin Money will benefit from protection of up to £85,000 offered by FSCS on both their Nationwide and Virgin Money accounts.

This is Money revealed that Nationwide is scrapping February 2025 passbooks and replacing them with a “modernised” savings wallet.

Nationwide said 2 percent of its 16 million customer base currently uses passbooks.

At Nationwide’s online AGM in July, chief executive Debbie Crosbie confirmed Nationwide would press ahead with its modernized savings wallet.

In the last financial year, Virgin Money generated pre-tax profits of £345m and announced distributions of around £270m to shareholders, it reported in its 2023 annual report and accounts.

Based on market analysts’ forecasts for Virgin Money’s pre-tax profits in 2024, Nationwide said the acquisition of Virgin Money would represent a 17 per cent return on the purchase price.

Kevin Parry, chairman of Nationwide, said: ‘Nationwide remains a mutual and is owned by our members.

“All profits generated by Virgin Money 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 mutual.”

Mortgages

For those with a Virgin Money mortgage, there is not much change for now and the home loan will continue as normal.

As the brand is phased out, Virgin mortgage holders are likely to be transferred to Nationwide.