Nationwide plans to create 500 jobs following Virgin Money takeover

New jobs are coming to Virgin Money's Newcastle operation, the bank's new owner Nationwide Building Society has indicated.

Nationwide bosses say that around 500 new roles will be created across the country, including some in the North East, spanning IT, customer service and business growth posts. It comes as Nationwide has launched an 18-month review of the Virgin Money business which will help it decide how to make the bank part of its own member-owned operation.

The mutual previously pledged to safeguard Virgin Money's staff's statutory rights and said it did not plan to change the size of the bank's workforce in the short term. It has also said it values Virgin's main office bases in Newcastle and Glasgow.

Nationwide's £2.8bn acquisition of the challenger bank completed in October, creating the UK's second largest provider of mortgages and retail deposits with assets of more than £370bn. The combined group now has a network of about 700 branches throughout the country, with plans to keep existing Virgin Money sites until at least 2028.

Over the next six years Virgin Money will be rebranded, with Nationwide saying its profits can now be used to benefit customers rather than paid to shareholders.

Nationwide chief executive Debbie Crosbie hailed the advantageous deal, which has given the building society a much larger than expected boost. It reported a £2.3bn gain from the takeover, indicating Virgin Money is now worth more than £5bn, compared to the £2.8bn Nationwide paid.

Debbie Crosbie, chief executive of Nationwide Building Society, said: "Nationwide delivered record first half growth in both mortgages and deposits, and record member value. Over the past 18 months, our mutual model has enabled us to provide over £3.5bn in member value, including £729m through the Nationwide Fairer Share Payment.

"Following our acquisition of Virgin Money on October 1, we've recorded a gain of £2.3bn, as the value of net assets acquired is well above the price we paid. This gain provides significant headroom to cover our investment in integration, as well as in service and value. Future profits generated by Virgin Money can now be used for the benefit of customers, rather than being paid to external shareholders."

Half year results for Nationwide showed a sharp drop in profits with statutory pre-tax profits falling to £569m in the six months to the end of September, compared with £989m in the same period last year. Meanwhile Virgin reported higher profits amid cost cutting efforts. Its statutory pre-tax profit jumped to £558m for the year to the end of September, from £345m the year before.