Virgin mortgage products to replace Nothern Rock's

Northern Rock mortgage customers are to start the year with a Virgin mortgage. Having taken over Northern rock, Virgin Money are preparing to contact its mortgage customers to confirm their acquisition and to advise of any rebranding.

The deal was initially announced on 16 November 2011 and sees Virgin Money paying £747 million for the bank. Under the terms of the agreement, Virgin Money will acquire 75 Northern Rock branches, which will have their name changed to Virgin Money. Most of the 'bad' Northern Rock mortgage and debt will be housed in Northern Rock Asset Management, which is under the umbrella of a state agency called UK Financial Investments. The 'bad' part of Northern Rock will remain under Government ownership.

More than three million Virgin Money customers will be added to Northern Rock's current one million savers and borrowers. The Virgin mortgage book will be worth £14 billion and its savings £16 billion. The enlarged Virgin Money will still be small in comparison to the existing High Street banking giants.

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. Ms Gadhia has 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.”

A spokesman for Virgin Money said that Northern Rock customers need not take any action adding they can expect to benefit from having a Virgin mortgage which will offer an improved service and better range of financial products.