Newcastle bank Virgin Money incurred almost £150m in costs when it was taken over by fellow challenger bank CYBG, including £77m for dropping its plans for a digital bank, new accounts reveal.
Virgin Money, which itself had taken over the assets of Northern Rock in 2012, was last year acquired by the owner of the Clydesdale and Yorkshire banks in a deal that valued the Newcastle company at around £1.7bn.
The two companies hoped that bringing together their respective operations would create a true challenger to the established High Street players, though the deal sparked fears over the long-term future of the combined company’s 2,000 staff in Newcastle.
Accounts for Virgin Money for 2018 outline how the bank become part of CYBG, de-listing from the Stock Exchange in October.
But the takeover process led to large one-off costs for the bank, including £48m directly linked to the deal and £77m for the closure of its digital bank project.