‘Deep unease’

The owners of Clydesdale and Yorkshire Bank, CYBG, confirmed today (June 18) that it has agreed to buy Virgin Money bank for £1.7bn – a move that could see 1,500 jobs axed.

The new bank, which will be the largest ‘challenger’ bank in competition with the ‘big five’ banks including HSBC, Lloyds, Barclays, Standard Chartered and NatWest/RBS, will retain only the Virgin Money brand. The new bank will transfer all Clydesdale and Yorkshire Bank customers to Virgin Money over the next three years.

CYBG said the newly combined workforce would total 9,500 – a number the bank wants to reduce by a sixth, which would entail a 1,500 reduction in jobs in a bid to make £120m in savings.

The bank said it hoped to shed jobs, most of which are managerial posts, by attrition, or not replacing people after they’ve left.

Branch closures

The newly formed bank, which will now operate a total of nearly 250 branches, also played down the prospect of branch closures.

CYBG finance chief Ian Smith said that it was “early days” to estimate how many branches would have to close after the merger but noted that Virgin Money “fills up some spaces that we don’t have at the moment”.

“So that’s one of the exciting things about this proposition, and we do believe that branches have an important role to play in our omni-channel model,” Smith added.

But workers and customers alike are understandably fearful – the latest Virgin Money buyout has happened in a climate of widespread branch closures. In 2018 alone, more than 600 bank branches have been earmarked for closure, and consumer group Which? estimates than since 2015, nearly 2000 branches have shut.

The most recent tranche of branch closures has included 162 Royal Bank of Scotland (RBS) branches which are due to shut later this year. The North West will be disproportionately affected, with 64 branch closures and an estimated 400 job losses.

Lloyds announced in April that it too that it would be closing branches– the bank has 98 planned closures so far this year including Halifax branches.

Some communities will be left without a bank to go to – in the most extreme case Unite has seen so far, RBS customers in Barrow will have to make a 130-mile round-trip journey to Preston in order to access full banking services.

Commenting on the latest news of the Virgin Money buyout, Unite national officer for finance Rob MacGregor said that Unite this morning “expressed deep unease about jobs and services across both these financial institutions.

“The purchase of Virgin Money by Clydesdale and Yorkshire Bank will change the face of banking in many high streets across the country,” he added. “It is vital that the skilled and experienced workforce are given assurances that branches and contact centres will not be closed leaving customers without their much valued access to local banking.”

MacGregor said that Unite, which is the recognised union for both Clydesdale and Yorkshire banks as well as Virgin Money, is now seeking an urgent meeting with new combined chief executive David Duffy “to secure assurances about the employment of the dedicated women and men across the county.”