TIDMVMUK TIDM91XR

RNS Number : 4621N

Virgin Money UK PLC

30 September 2021

VIRGIN MONEY UK PLC

(Group or Virgin Money UK)

LEI: 213800ZK9VGCYYR6O495

30 September 2021

Virgin Money UK updates on the acceleration of its digital strategy

As outlined at Virgin Money UK's H1 results in May, the Group has been evaluating the opportunities to accelerate its digital strategy enabling greater efficiency and driving up levels of digitisation across the bank to further develop a strong, scalable platform for future growth.

Emerging from the pandemic, the Group continues to see greater appetite for digital self-service, with customers increasingly adopting digital channels. The Group also continues to evolve its operating model to reduce real estate costs along with giving colleagues more flexibility, and to take opportunities to increase automation, leveraging technology throughout key processes.

As Virgin Money UK comes to the end of its Integration and Transformation programmes, the Group is accelerating the next phase of its strategy and increasing the level of investment in digital initiatives. As a result, restructuring charges for FY21 are now expected to be c.GBP145m in total with an additional c.GBP45m booked in Q4, as the Group launches the initial actions in order to deliver on its strategic ambition to be the UK's best digital bank.

There are three key elements to be accelerated:

- Store closures: During COVID-19 the Group has seen a shift in sales volumes and communications to digital and mobile channels, with lower branch footfall. As part of its review, the Group has identified 31 stores out of the 162 in its network which will be closed over the coming months. As a result, the Group will take a c.GBP25m restructuring charge in Q4.

- Life More Virgin target operating model changes: The Group's Life More Virgin working model aims to give colleagues greater flexibility around working patterns and location, seeking to support colleagues to achieve a better work-life balance and boost well-being and productivity. The changes also mean the Group will have lower office space requirements, with infrastructure and office hubs re-purposed to fit new ways of working. After applying valuation adjustments and including other operating model changes, the Group will incur a c.GBP20m restructuring charge in Q4.

- Greater automation: Having delivered Integration, the Group is now aiming to further simplify the IT estate by moving to cloud-based infrastructure which will streamline and automate key processes. These changes will further enable agile delivery, increasing the pace of change and delivering efficiency benefits over time.

The steps announced today are the first phase of the acceleration of Virgin Money UK's digital strategy, which will drive further productivity gains and build capacity for ongoing re-investment, further digitisation and in time, greater cost efficiency.

The Group's digital strategy will further develop a strong, scalable platform for future growth. In the near term, cost savings from improved productivity delivered by Virgin Money UK's digital initiatives will be reinvested into the business to further accelerate the pace of platform development. Virgin Money UK will also leverage the capabilities of its key strategic partnerships, such as those announced with Global Payments and Capita, to deliver additional features and differentiated propositions for customers. The Group will provide additional detail on the efficiency benefits and investment opportunities as well as its growth ambitions alongside its Full Year results.

Announcement authorised for release by Lorna McMillan, Group Company Secretary.

For further information, please contact:

 
 Investors and Analysts 
 Richard Smith                         +44 7483 399 303 
                                      ------------------------------------ 
 Head of Investor Relations            richard.smith@virginmoneyukplc.com 
                                      ------------------------------------ 
 
 Amil Nathwani                         +44 7702 100 398 
                                      ------------------------------------ 
 Senior Manager, Investor Relations    amil.nathwani@virginmoneyukplc.com 
                                      ------------------------------------ 
 
 Martin Pollard                        +44 7894 814 195 
                                      ------------------------------------ 
 Senior Manager, Investor Relations    martin.pollard@virginmoneyukplc.com 
                                      ------------------------------------ 
 
 Company Secretary 
                                      ------------------------------------ 
 Lorna McMillan                        07834 585 436 
                                      ------------------------------------ 
 Group Company Secretary               lorna.mcmillan@virginmoneyukplc.com 
                                      ------------------------------------ 
 
 Media Relations 
                                      ------------------------------------ 
 Matt Magee                            +44 7411 299477 
                                      ------------------------------------ 
 Head of Media Relations               matthew.magee@virginmoneyukplc.com 
                                      ------------------------------------ 
 
 Simon Hall                            +44 7855 257 081 
                                      ------------------------------------ 
 Senior Media Relations Manager        simon.hall@virginmoneyukplc.com 
                                      ------------------------------------ 
 
 Press Office                          0800 066 5998 
                                      ------------------------------------ 
                                       press.office@virginmoneyukplc.com 
                                      ------------------------------------ 
 

Forward looking statements

The information in this document may include forward looking statements, which are based on assumptions, expectations, valuations, targets, estimates, forecasts and projections about future events. These can be identified by the use of words such as 'expects', 'aims', 'targets', 'seeks', 'anticipates', 'plans', 'intends', 'prospects' 'outlooks', 'projects', 'forecasts', 'believes', 'estimates', 'potential', 'possible', and similar words or phrases. These forward looking statements, as well as those included in any other material discussed at any presentation, are subject to risks, uncertainties and assumptions about the Group and its securities, investments and the environment in which it operates, including, among other things, the development of its business and strategy, any acquisitions, combinations, disposals or other corporate activity undertaken by the Group (including but not limited to the integration of the business of Virgin Money Holdings (UK) plc and its subsidiaries into the Group), trends in its operating industry, changes to customer behaviours and covenant, macroeconomic and/or geopolitical factors, the repercussions of the outbreak of coronaviruses (including but not limited to the COVID-19 outbreak), changes to its board and/ or employee composition, exposures to terrorist activity, IT system failures, cyber-crime, fraud and pension scheme liabilities, changes to law and/or the policies and practices of the Bank of England, the FCA and/or other regulatory and governmental bodies, inflation, deflation, interest rates, exchange rates, tax and national insurance rates, changes in the liquidity, capital, funding and/ or asset position and/or credit ratings of the Group, future capital expenditures and acquisitions, the repercussions of the UK's exit from the EU (including any change to the UK's currency and the terms of any trade agreements (or lack thereof) between the UK and the EU), Eurozone instability, and any referendum on Scottish independence.

In light of these risks, uncertainties and assumptions, the events in the forward looking statements may not occur. Forward looking statements involve inherent risks and uncertainties. Other events not taken into account may occur and may significantly affect the analysis of the forward looking statements. No member of the Group or their respective directors, officers, employees, agents, advisers or affiliates gives any assurance that any such projections or estimates will be realised or that actual returns or other results will not be materially lower than those set out in this document and/or discussed at any presentation. All forward looking statements should be viewed as hypothetical. Whilst every effort has been made to ensure the accuracy of the information in this document, the Group and their directors, officers, employees, agents, advisers and affiliates do not take any responsibility for the information in this document or to update or revise it. They will not be liable for any loss or damages incurred through the reliance on or use of it. No representation or warranty, express or implied, as to the truth, fullness, fairness, merchantability, accuracy, sufficiency or completeness of the information in this document or the materials used in and/ or discussed at, any presentation is given.

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September 30, 2021 02:00 ET (06:00 GMT)

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