Virgin Money will continue to issue Clydesdale Bank notes in Scotland despite the business being rebranded.Read more
Royal Bank of Scotland had to set up a £775m fund to boost competition in the sector under the terms of its bail out package.
Some £280m has now been parcelled out. An award of £120m has gone to Metro Bank, £100m to Starling Bank and £60m to Clear Bank.
Banking Competition Remedies, which was set up to implement the fund, said it had received 16 applications from six applicants for the fund.
CYBG, the owner of Clydesdale, Yorkshire and Virgin Money, said it been told it had not received a grant. TSB and Co-operative Bank are also reported to have been interested.
Commenting on the news that Clydesdale and Yorkshire Bank will be switching its name to Virgin Money, Nick Cooper, of branding consultancy, Landor said:
The Virgin Money brand is perceived as entirely different to other banks and that’s why it’s the right one to take forward. When this deal is complete it will give Virgin Money the scale that it currently lacks and could propel the brand into a position from where it can really challenge the established high street lenders.
The Clydesdale Bank brand will be ditched despite being established back in 1838. It survived after being acquired by Midland Bank in 1920 and when it was sold to National Australia Bank in 1989.
Yorkshire Bank, the other brand to be dumped, dates back to 1859.
BBC Radio 4
Talking about the banking merger confirmed this morning, David Duffy, chief executive of CYBG tells the BBC's Today Programme that: "Our goal is to move to the Virgin Money brand over time."
He's upbeat about the combined group taking on the traditional Big Four banks.
"You need a minimum level of scale but you don’t need to be as big as the others to compete," he says.
"In the future banking model, you’re going to be much more looking at technology and agility than scale. We have sufficient scale, the products, the brand, and the technology. And at the same time we’re small enough and agile enough to deliver a much better proposition for customers."
He adds that the merger won't create a similar level of computer chaos as that experienced at TSB recently.
He says: "There's no big IT migration. It's just a transition of [100,000 current account] customers over time."
Virgin Money has agreed to a takeover offer from CYBG, the owner of Clydesdale and Yorkshire Bank.
Under the terms of the offer, Virgin Money shareholders will be handed 1.2125 new CYBG shares in exchange for each of their shares. That values Virgin Money shares at 371p each and the business at £1.7billion.
The combined group will continue to use the Virgin Money brand and chief executive Jayne-Anne Gadhia will stay on for the moment as an adviser.
David Duffy, chief executive of CYBG, said: "The combination of CYBG and Virgin Money will create the first true national competitor to the status quo in UK banking,"