Nationwide agrees £2.9 billion Virgin Money takeover deal

The firm, based in Pipers Way, has put forward a 220p-a-share approach for High Street lender Virgin Money, in a move that would create the UK’s second largest mortgage and savings group.

A preliminary agreement has been reached over the deal, which would also include a planned 2p-per-share dividend payout.

Nationwide is now looking through Virgin Money’s books before making a firm offer.

If formalised, the proposed deal would create a combined lender worth around £366.3 billion with 696 branches, making it the second largest group branch network behind Lloyds Banking Group.

Nationwide said it does not intend to make any material changes to the size of Virgin Money’s 7,300-strong workforce “in the near term”.

Nationwide HQ in Pipers Way (Image: Dave Cox)

But the building society also revealed it plans to rebrand the Virgin Money business as Nationwide within six years, though it will keep the two brands initially.

The firm stressed that it will remain a mutual building society if the deal goes ahead.

Nationwide added it would keep a branch in each location where the combined group is present, until at least the start of 2026, and “values Virgin Money’s ongoing presence in Glasgow and Newcastle”.

Debbie Crosbie, chief executive of Nationwide Building Society, said: “Importantly, Nationwide will remain a building society, and a combined group would bring the benefits of fairer banking and mutual ownership to more people in the UK, including our continuing commitment to retain existing branches as part of our Branch Promise, and leading levels of customer service.

“We believe the combination would create a stronger and more diverse business that will be better placed to deliver value to our members and customers, both now and in the future.”

The planned deal comes after a series of proposals from Nationwide, according to Virgin Money.

Nationwide branch in Swindon (Image: Newsquest)

The lender added that if a firm offer is made on the current terms its board would “be minded to recommend it to Virgin Money shareholders”.

Virgin Money is currently the UK’s sixth largest retail bank, with around 6.6 million customers and total lending of £72.8 billion.

Chief executive David Duffy said: “This potential transaction with Nationwide represents an exciting opportunity to build on the significant progress we have made in becoming the only new Tier 1 bank in recent history.

“The combined scale and strength would expand our customer offering and complete our journey in the banking sector as a national competitor.”