Nationwide’s £2.9bn takeover of Virgin Money set to be completed in early October

Nationwide’s takeover of Virgin Money could be finalised next month after financial regulators gave their approval.

Both the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) have given their ‘requisite consent’ to the £2.9billion tie-up, the two lenders announced to investors.

The deal has already received clearance from the Competition and Markets Authority and Virgin Money shareholders, including Sir Richard Branson, the company’s largest investor and noted entrepreneur.

Branson, who owns a 14.5 per cent stake in Virgin Money, will receive an estimated £650million from the acquisition.

Many Nationwide members demanded a vote on the deal, but the building society refused, claiming it was not legally necessary and would be impossible to conduct within a short time period owing to its massive membership base.

But the takeover still requires sanctioning by a court, with a hearing anticipated to happen on 27 September.

Should the court give its consent, the lenders expect the deal to be completed on 1 October.

‘The acquisition will not require any immediate changes to the capital structure of the Virgin Money Group or the combined group as a whole,’ the lenders said.

Initially agreed in March, the planned takeover will create an enlarged business with around 24.5 million customers, over 25,000 employees and about £366.3billion of total assets.

Nationwide has also vowed to keep all Virgin Money branches open for at least four years and continue using the Virgin brand name until at least 2030.

Furthermore, the group’s deputy finance boss, Muir Mathieson, has replaced Chris Rhodes as chief financial officer.

Rhodes, who joined Nationwide in 2009 from Abbey Santander, will remain on the company’s board until he succeeds David Duffy as Virgin Money’s chief executive.

Founded in 1995 in partnership with Norwich Union, subsequently rebranded Aviva, Virgin Money has grown to become the UK’s sixth-largest retail bank.

It bought Northern Rock for £747million in 2011 four years after the Newcastle-based lender was nationalised when it nearly collapsed during the early stages of the credit crunch.

Virgin Money was itself bought seven years later for £1.6billion by CYBG, the owner of Clydesdale Bank and Yorkshire Bank.

In the three months ending June, the firm’s customer lending levels slipped by 0.9 per cent to about £72billion, but its deposits rose by 3.8 per cent to £69.8billion.  

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