The owner of Clydesdale and Yorkshire banks, CYBG, has once again registered its interest to merge with Virgin Money and form a challenger bank worth £4bn.
CYBG has put forward a revised bid which is said to be higher than the group’s initial offer of £1.6bn made in May.
The new approach comes ahead of a deadline, set for June 18.
It’s been said by both companies that they believed the deal would create the UK’s “first banking competitor”.
A combination of the two companies would create a personal and SME banking group with 6 million customers and a £70bn balance sheet. This would far exceed any of Britain’s other challenger banks.
If the merger goes ahead this could be significant for the UK banking sector, and could come as a challenger to the traditional big five banks in the UK – Barclays, HSBC, Lloyds, RBS and Santander.
However, challenger banks have had a difficult time in the past, with TSB being hit by a major IT crisis in May and the Co-op bank being rescued by a group of US hedge funds last summer – after posting a pre-tax loss of £174.4m for 2017, compared to a loss of £477.1m a year earlier.
CYBG has a market value of nearly £2.6bn, while Virgin Money is worth £1.53bn.