MORE job cuts have been signalled by Glasgow-based CYBG as the institution revealed the Clydesdale Bank name will disappear from the Scottish high street within two years, bringing nearly two centuries of banking tradition to an end.
CYBG raised the prospect of further redundancies as it targeted an additional £50 million of annual net cost savings stemming from its merger with Virgin Money by the end of 2022. Shares surged by more than six per cent as investors digested the news.
CYBG, which was floated by former owner National Australia Bank in 2016, previously warned the £1.7 billion merger would lead to around 1,500 job losses amid initial plans to achieve annual cost savings of £150m. The bulk of those cuts, which will affect 16% of the combined workforce, will focus on senior management roles.
READ MORE: Clydesdale for the axe following Virgin Money deal
Now the bank is aiming to be making total annual net cost savings of £200m by 2022.
CYBG did not elaborate on how many more jobs could be a risk.
A spokesman said: “It might include some further role reductions and automation in the branch network and other operational areas.
“We will continue to work through the details and will inform our colleagues first of any implications.”
The prospect of further redundancies comes after CYBG said in May that 25 jobs would be at risk in Scotland after it swung the axe on a further five branches. The cuts will effectively result in the bank withdrawing its branch presence from four Scottish towns – Arbroath, Brora, Largs and St Andrews. A fifth branch, in Glasgow’s Shettleston, will also close.
READ MORE: Glasgow bank withdraws fully from four Scottish towns
The latest closures came after the bank pulled the plug on nearly 80 branches in the UK in 2016, including 40 in Scotland, with that cull expected to have resulted in 400 redundancies.
Yesterday’s cost savings announcement came on the day CYBG revealed its timetable for changing its name to Virgin Money and ditching the names Clydesdale Bank and Yorkshire Bank.
CYBG said its name will change is name to Virgin Money UK in late 2019, with the Clydesdale and Yorkshire identities – and digital brand B – to be phased out and replaced by Virgin Money by the end of 2021.
Virgin Money personal and business current accounts will be rolled this year and next.
The bank said it aims to boost its share of the personal current account market from around 2.5% to 3.5%, and its share of the business account market from 3.5% to around 5%.
READ MORE: Clydesdale warns more branches could be at risk
However, the decision to axe the Clydesdale Bank name has been met with dismay in some quarters since it was first revealed around a year ago. The Clydesdale name has been a fixture in Scottish banking since its formation in 1838.
CYBG chief executive David Duffy said: “Clydesdale and Yorkshire Bank have been serving customers in Scotland and the North of England for over 175 years. Both brands are a by-word for reliability and trust and we understand the emotional attachment customers and local communities have towards them.
“The decision to retire brand names with such long and proud histories is not an easy one. Marrying the values and expertise of these heritage brands with the Virgin Money brand will allow us to realise efficiencies and grow our business throughout the UK.”
CYBG last month reported a statutory profit of £42 million for the six months to March 31, with mortgage lending increasing despite protracted Brexit uncertainty and tough competition in the market. Mr Duffy predicted then that uncertainty would continue to dog the sector while a breakthrough in the Brexit process remained elusive.
It was reported yesterday that the demise of the Clydesdale as a trading name for branches and accounts will not lead to the bank stop issuing Clydesdale notes.
Shares in CYBG closed up 6.2%, or 11.5p, at 196.95p.
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