Merger progressing as planned
CYBG on course to complete Virgin deal by year end
Clydesdale’s merger with Virgin is on track
CYBG said its planned merger with Virgin Money is progressing as planned and it expects the deal to complete before the end of the year.
Shareholder documentation will be published tomorrow with investors invited to vote on the all-share offer at meetings on 10 September.
In an update on performance CYBG – owner of Clydesdale and Yorkshire banks – said trading in the three months to 30 June has been in line with the board’s expectations.
As expected, PPI complaint volumes remain “elevated”, but are trending in line with the bank’s expectations for the second half of 2018.
It said it continues to expect a slow-down in complaint volumes into FY19 due to the impact of the Financial Guidance and Claims Act that became effective in July which implemented a fee cap and limits to cold-calling for claims management Companies.
David Duffy, chief executive, said: “We have delivered another solid performance this quarter, achieving sustainable lending and deposit growth in a highly competitive market while maintaining a stable net interest margin and delivering further cost and process efficiencies in the business. We remain on track to deliver our guidance for FY18.
“Our position as one of the UK’s leading digital banks continues to strengthen: in May we launched our fully API-enabled account aggregation for customers and this month we announced a new innovative partnership with PayPal underlining our ability to work with tech players large and small to deliver new and convenient services for customers.
“The economic and political environment in the UK remains uncertain, but we remain focused on delivering our strategic objectives and capturing further growth opportunities. This includes the RBS Alternative Remedies Scheme where we plan to play a significant role following confirmation of the scheme timetable.
“We continue to expect our recommended all-share offer for Virgin Money to complete in calendar Q4 2018, subject to shareholder and regulatory approvals, creating the UK’s first true national competitor to the status quo.”
Mr Duffy will stay on as chief executive of the combined group, leaving Virgin Money boss Jayne-Anne Gadhia to serve in a consultancy role as his senior adviser.
In what is expected to be its final set of figures as an independent bank, Virgin Money last week reported a better-than expected rise in profits. For the six months ended 30 June, underlying pre-tax profit rose 10% to £141.6 million, up from £128.6m.