Branson’s Virgin Money completes Northern Rock deal

The Government agreed in November to sell Northern Rock to Virgin Money – the banking arm of billionaire Richard Branson’s Virgin Group – for between £747m and £1bn.

The deal does not recoup all of the £1.4bn spent by the authorities to keep the bank afloat during the credit crisis.

The Labour Party wanted the deal to be put on hold while the National Audit Office investigates the sale.

Northern Rock, the victim of the first run on a British bank in many decades, was nationalised three years ago after nearly collapsing during the credit crunch.

David Clementi, a former deputy governor of the Bank of England, will be chairman of the new banking group and Jayne-Anne Gadhia will be its chief executive, Virgin said, announcing the deal’s completion.

Ms Gadhia said: “We have a unique opportunity to build a new kind of bank in the UK, a bank that will aim to make a real difference and provide enhanced competition in UK retail banking.”

She added: “Northern Rock and Virgin Money fit together perfectly and both have real experience in delivering service that customers truly value.

“We will now work together in our quest to change banking for the better.”

The acquisition includes 75 Northern Rock branches, one million customers, a mortgage book worth about £14bn, a £16bn retail deposit book, and about 2,100 employees.

Combined with Virgin Money’s existing business of three million customers, the enlarged group will have over four million customers.