The combined group now has over six million customers, with around £84bn of assets and in the region of £70bn of customer loans.

The retail brand for the combined group will transition to the Virgin Money brand over the next three years.

The bank expects to generate £120m of annual pre-tax cost synergies by the end of September 2021.

David Duffy, chief executive at CYBG (pictured above), said: “Today marks a historic milestone for CYBG and Virgin Money, creating the first true national competitor to the status quo in UK banking with a clear ambition to provide customers with the best service in the UK.

“We are focused on delivering an excellent customer experience as we bring the two businesses together. 

“This will be achieved through a clear, low-complexity, phased integration and rebranding plan over the next three years.

"This is a unique combination that will enable us to compete with the large incumbent banks.”

Josh Bayliss, CEO at Virgin Group, added: “Today’s announcement marks the beginning of the next chapter in the Virgin Money story.

“The combination of Virgin Money and CYBG will offer unrivalled service, an innovative digital platform and outstanding products, bringing huge benefits for customers, employees and communities alike. 

“Together we have the size, scale and financial firepower to change banking for good.”

In the combined group, David will serve as CEO, while Ian Smith, current chief financial officer at CYBG, will retain the same role.

Jayne-Anne Gadhia, former chief executive at Virgin Money, will be stepping down as CEO, but has agreed in principle to support the group as a senior advisor to David for a period of up to 18 months.

Meanwhile, the remaining CYBG leadership team will keep their current roles with Peter Bole and Hugh Chater joining from the Virgin Money executive team.

Peter will join as group integration director, and Hugh will oversee the day-to-day operation of the Virgin Money business in support of David.

David added: “I am especially pleased Peter and Hugh will be joining our team. 

“Both bring fantastic experience and expertise which – along with the wider leadership team – will be invaluable in helping us bring together the complementary strengths of both businesses and deliver the UK’s first true national competitor in banking.”