CYBG cans Virgin Money deal with Antony Jenkins startup

CYBG cans Virgin Money deal with Antony Jenkins startup

CYBG has dealt a blow to the fintech ambitions of former Barclays chief Antony Jenkins, aborting a deal between his startup venture 10X Future Technologies and newly acquired Virgin Money.

Clydesdale and Yorkshire Bank agreed a £1.7 billion deal in June to take over Virgin Money, with the aim of creating a brand with six million personal and business customers capable of taking on the UK's biggest lenders.

Virgin Money was the first major client for Jenkins' fintech startup, securing a contract in November 2016 to build a new digital core using API-based middleware to connect up legacy systems.

At the time of the takeover, CYBG flagged up £120 million in annual pre-tax cost synergies, including the mothballing of Virgin Money's online banking project, which last year accounted for £38.3 million in expenditure.

CYBG has now come good on its promise, confirming to Sky News: "We have been clear that we plan to use CYBG's existing iB technology platform - designed for the world of Open Banking - to support our 6m customers.

"We have informed 10x of our intention to exit the agreement with Virgin Money. We wish the 10x team the very best for the future."

10X can claim a sizeable cancellation fee, but the ousting of its only named banking client is a huge blow for the firm, which was understood to be in talks with investors about a new funding round.

In November last year, Jenkins raised £34 million in a funding round led by Chinese insurer Ping An to help bring his new fintech startup to Asia.

A 10x spokesman insisted that the business was "in good shape, with a strong pipeline and many opportunities ahead of us". He said 10x had already signed additional clients but declined to name them.

He added: “We remain focused on the continuing development of our technology platform, having recently carried out the first live real money and merchant transactions across our platform at the end of October."
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