Publication of Scheme Document

On 21 March 2024, the boards of Virgin Money and Nationwide announced that they had agreed the terms of a recommended cash acquisition of the entire issued and to be issued share capital of Virgin Money by Nationwide (the "Acquisition"). The Acquisition is to be implemented by means of a scheme of arrangement between Virgin Money and its shareholders under Part 26 of the Companies Act (the "Scheme") and is subject to the terms and conditions set out in the scheme document relating to the Acquisition (the "Scheme Document").

Publication of Scheme Document

Virgin Money and Nationwide are pleased to announce that the Scheme Document, together with the associated Forms of Proxy, CDI Voting Instruction Forms, and CSN Voting Notification, are today being sent, or made available, to Virgin Money Shareholders and, for information purposes only, to persons with information rights and participants in the Virgin Money Share Plans. The Scheme Document contains, among other things, a letter from the Board Chair of Virgin Money, an explanatory statement pursuant to section 897 of the Companies Act, the full terms and Conditions of the Scheme and the Acquisition, notices convening the Court Meeting and the General Meeting, an expected timetable of principal events and details of the actions to be taken by Virgin Money Ordinary Shareholders and Virgin Money CDI Holders.

A copy of the Scheme Document will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Virgin Money's website at www.virginmoneyukplc.com/investor-relations/announcements/ and on Nationwide's website at https://www.nationwide.co.uk/investor-relations/virgin-money-terms-of-access/ by no later than 12 noon (London time) on 23 April 2024. A copy of the Scheme Document will also be submitted to the National Storage Mechanism and will shortly be available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

Unless otherwise defined, all capitalised terms in this announcement have the meaning given to them in the Scheme Document. Unless the context otherwise requires, references in this announcement to Virgin Money Shares and Virgin Money Shareholders include Virgin Money CDIs and Virgin Money CDI Holders, as applicable. All references to times are to London, UK, times unless otherwise stated.

Current trading of Virgin Money

As set out in paragraph 8 of Part 1 (Letter from the Board Chair) of the Scheme Document and following the announcement on 21 March 2024, Virgin Money has continued to perform broadly as anticipated in the remainder of Q2 FY 2024. Over H1 FY 2024, Virgin Money delivered continued growth in relationship deposits and target lending segments, whilst maintaining a broadly stable margin, with ongoing cost efficiencies mitigating inflation. Net interest margin continued to be resilient, despite competition and the interest rate backdrop, supported by ongoing effective interest rate outperformance in the credit cards portfolio. Costs in Q2 FY 2024 reflected the timing of annual wage rises and the new bank levy in the quarter. Asset quality trends remain broadly consistent with those set out as part of the Q1 FY 2024 trading statement and Virgin Money has progressed its review of the application of SICR (significant increases in credit risk) on the credit cards portfolio in line with expectations. During Q2 FY 2024, Virgin Money maintained a robust liquidity and funding position, with a strong capital position which, relative to Q1 FY 2024, benefited from the cancellation of the Virgin Money Group's share buyback programme.

Over the remainder of FY 2024, lower interest rates and competitive market dynamics are expected to be a headwind to net interest margin, offset by reinvestment of the structural hedge, growth in target segments and ongoing credit cards effective interest rate outperformance. The impact of persistent inflation and ongoing investment are expected to be headwinds to cost performance, partially mitigated by Virgin Money's existing cost saving programme.

The Virgin Money Group's half year performance remains subject to the usual ongoing finalisation and review process. The Virgin Money Board is in the process of finalising the appointment of Ernst & Young LLP as Virgin Money's auditors and following that change, full interim results are expected to be released on 13 June 2024 with an unaudited trading update on first half performance on 14 May 2024.

Payment currency of the Consideration and the FY 2024 Dividend

The Consideration payable under the Scheme and the FY 2024 Dividend will be paid to each Virgin Money Shareholder entitled thereto in the same currency as dividend payments that such Virgin Money Shareholder would receive from Virgin Money in the ordinary course and in accordance with any existing Electronic Payment Mandate held by Computershare at the relevant record time.

The FY 2024 Dividend will be paid (subject to the approval of the Virgin Money Board) as part of Virgin Money's ordinary course FY 2024 dividend calendar or, if earlier, shortly prior to Completion to Scheme Shareholders on the relevant dividend record date.

Where the FY 2024 Dividend or the Consideration (as applicable) is to be paid to a Virgin Money Shareholder in Australian Dollars or New Zealand Dollars: (i) the FY 2024 Dividend will be converted from pounds sterling to Australian Dollars or New Zealand Dollars at the relevant exchange rate on the date which is expected to be one Business Day (provided such Business Day is also an Australian Business Day) after the relevant dividend record date and in line with past practice; and (ii) the Consideration will be converted from pounds sterling to the relevant currency at the Consideration Exchange Rate.

The Consideration Exchange Rate includes a deduction for any applicable and properly incurred transaction and dealing costs associated with the conversion. The direct cost of conversion to Virgin Money Shareholders who receive the Consideration to which they are entitled in Australian Dollars or New Zealand Dollars is expected to be minimal but amounts payable to such Virgin Money Shareholders will be subject to the Consideration Exchange Rate actually obtained by or on behalf of Nationwide (which may be a lesser rate of exchange than the official pounds sterling to Australian Dollars or New Zealand Dollars exchange rate published by the Bank of England on the relevant payment date).

The attention of Virgin Money Ordinary Shareholders and Virgin Money CDI Holders is drawn to paragraph 14(A) of Part 2 (Explanatory Statement) of the Scheme Document which provides further details on the applicable exchange rates and instructions for any Virgin Money Ordinary Shareholder or Virgin Money CDI Holder who wishes to amend their payment instructions.

Notices of the Court Meeting and the General Meeting

Notices of the Court Meeting and the General Meeting, both of which will be held at Virgin Money's registered office, Jubilee House, Gosforth, Newcastle upon Tyne, England, NE3 4PL on Wednesday 22 May 2024, are set out in Part 9 (Notice of Court Meeting) and Part 10 (Notice of General Meeting) of the Scheme Document. The Court Meeting will commence at 1.00 p.m. and the General Meeting at 1.15 p.m. (or, if later, as soon as the Court Meeting has concluded or been adjourned).

As described in the Scheme Document, to become Effective the Scheme requires, among other things, (i) the approval of the Scheme by a majority in number of the Scheme Shareholders present and voting (and entitled to vote) either in person or by proxy at the Court Meeting representing not less than 75 per cent. in value of the relevant Scheme Shares voted, (ii) the passing of the Acquisition Resolution (being the special resolution of Virgin Money Shareholders to approve the Acquisition) and the Virgin Resolution (being the ordinary resolution of Independent Virgin Money Shareholders to approve the TMLA Amendment Agreement and the Virgin Red Exclusivity Agreement) at the General Meeting and (iii) the subsequent sanction of the Scheme by the Court. The Scheme is also subject to the satisfaction or waiver of the other Conditions and further terms that are set out in the Scheme Document, including the receipt of certain regulatory clearances.

In addition, the Virgin Money Shareholders will also be asked to vote on the Remuneration Policy Resolution (being the ordinary resolution of Virgin Money Shareholders to approve the amendment to the Directors' Remuneration Policy) at the General Meeting. The passing of the Remuneration Policy Resolution is not a Condition to the Scheme or to Completion.

The Scheme is not subject to any condition relating to the passing of a resolution by Nationwide's members.

It is important that, for the Court Meeting, as many votes as possible are cast so that the Court may be satisfied that there is a fair representation of the opinion of the Scheme Shareholders. Virgin Money Shareholders are therefore strongly urged to (a) in the case of Virgin Money Ordinary Shareholders and Virgin Money CDI Holders, complete and return their Forms of Proxy (or make an electronic appointment of a proxy or submit a proxy vote via CREST) or CDI Voting Instruction Forms (or submit their instructions electronically), as applicable, (b) in the case of a Virgin Money Share Account Holder, instruct the Equiniti Nominee to exercise the voting rights attached to the Virgin Money Ordinary Shares it holds on their behalf as soon as possible, or (c) in the case of a Virgin Money Share Plan Account Holder, instruct the Computershare Nominee to exercise the voting rights attached to the Virgin Money Ordinary Shares it holds on their behalf as soon as possible via EquatePlus. The deadlines for appointing proxies and submitting voting instructions are set out in the Appendix to this announcement and in the Scheme Document.

Recommendation

The Scheme and the Acquisition

The Virgin Money Directors, who have been so advised by Goldman Sachs International and J.P. Morgan Cazenove as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing their advice to the Virgin Money Directors, Goldman Sachs International and J.P. Morgan Cazenove have taken into account the commercial assessments of the Virgin Money Directors. In addition, the Virgin Money Directors consider the Acquisition to be in the best interests of Virgin Money and Virgin Money Shareholders as a whole.

Accordingly, the Virgin Money Directors recommend unanimously that Scheme Shareholders vote in favour of the Scheme at the Court Meeting and the Virgin Money Shareholders vote in favour of the Acquisition Resolution at the General Meeting (or in the event that the Acquisition is implemented by way of an Offer, accept such Offer) as the Virgin Money Directors who are interested in Virgin Money Shares have each irrevocably undertaken to do in respect of their own beneficial shareholdings in Virgin Money.

Approval of the TMLA Amendment Agreement and the Virgin Red Exclusivity Agreement

The terms of the TMLA Amendment Agreement and Virgin Red Exclusivity Agreement are considered by Goldman Sachs International and J.P. Morgan Cazenove to be fair and reasonable. In forming this view, Goldman Sachs International and J.P. Morgan Cazenove have taken into account the commercial assessments of the Independent Virgin Money Directors.

The Independent Virgin Money Directors consider that the Virgin Resolution is in the best interests of Virgin Money and the Virgin Money Shareholders as a whole, and therefore recommend unanimously that the Independent Virgin Money Shareholders vote in favour of the Virgin Resolution at the General Meeting as the Independent Virgin Money Directors who are interested in Virgin Money Shares have each irrevocably undertaken to do in respect of their own beneficial shareholdings in Virgin Money.

The passing of the Virgin Resolution forms a non-waivable condition to the Acquisition and, if not passed, the Acquisition will lapse and will not proceed to Completion.

The Remuneration Policy Resolution

In addition, the Non-Executive Virgin Money Directors consider that the Remuneration Policy Resolution is in the best interests of Virgin Money and the Virgin Money Shareholders as a whole. Accordingly, the Non-Executive Virgin Money Directors unanimously recommend that Virgin Money Shareholders vote in favour of the Remuneration Policy Resolution at the General Meeting. The passing of the Remuneration Policy Resolution is not a Condition to the Scheme or to Completion.

Timetable

The Scheme Document contains an expected timetable of principal events relating to the Scheme, which is also set out in the Appendix to this announcement. Subject to obtaining the necessary approvals of Scheme Shareholders at the Court Meeting and Virgin Money Shareholders at the General Meeting, the sanction of the Court and the satisfaction or, where applicable, waiver of the other Conditions (as set out in Part A of Part 3 (Conditions to and further terms of the Acquisition) of the Scheme Document), the Scheme is expected to become Effective during calendar Q4 of 2024.

If the Scheme is approved as outlined above, dealings in Virgin Money Ordinary Shares are expected to be suspended from 7.30 a.m. on the Business Day following the Court Hearing. It is intended that the London Stock Exchange and the FCA will be requested, respectively, to cancel trading in Virgin Money Ordinary Shares on the London Stock Exchange's main market for listed securities and to remove the listing of the Virgin Money Ordinary Shares from the Official List, in each case by 8.00 a.m. on the Business Day following the Effective Date.

Dealings in Virgin Money CDIs are expected to be suspended from 4.00 p.m. (AEST) on the date falling two Australian Business Days prior to the Court Hearing. It is intended that ASX Limited will be requested to remove the listing of Virgin Money from the Australian Securities Exchange on the Australian Business Day following the Effective Date.

The times and dates given in the expected timetable of principal events are based on Virgin Money's and Nationwide's current expectations and may be subject to change. If any of the times and dates set out in the timetable change, Virgin Money will give notice of this change by issuing an announcement through a Regulatory Information Service and the ASX Market Announcements Platform and, if required by the Panel, posting notice of the change(s) to Virgin Money Shareholders and persons with information rights. Such announcement will be made available on Virgin Money's website at www.virginmoneyukplc.com/investor-relations/announcements/ and on Nationwide's website at https://www.nationwide.co.uk/investor-relations/virgin-money-terms-of-access/. All Virgin Money Shareholders have the right to attend the Court Hearing.

Information for Virgin Money Shareholders

If you have any queries and are:

• a Virgin Money Ordinary Shareholder, please call the Virgin Money Shareholder helpline between 8.30 a.m. and 5.30 p.m. Monday to Friday (except public holidays in England and Wales) on 0370 707 1172 from within the UK (or +44 (0)370 707 1172 if calling from outside the UK). Calls to the helpline from outside the UK will be charged at applicable international rates. Different charges may apply to calls from mobile telephones;
• a Virgin Money Share Account Holder, please call the Virgin Money Share Account helpline between 8.30 a.m. and 5.30 p.m., UK time, Monday to Friday (except public holidays in England and Wales) on +44(0) 371 384 2937. Please use the country code if calling from outside the UK. For deaf and speech impaired shareholders, we welcome calls via Relay UK. Please see www.relayuk.bt.com for more information. Calls to the Virgin Money Share Account helpline from outside the UK will be charged at the applicable international rate. Different charges may apply to calls from mobile telephones; or

Please note that the helplines referred to above are unable to give advice on the merits of the Acquisition or to provide financial, tax or investment advice. Calls may be recorded and randomly monitored for security and training purposes.

Request for hard copies

Virgin Money's LEI Number is 213800ZK9VGCYYR6O495.

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

Clifford Chance LLP is acting as legal adviser to Virgin Money in connection with the Acquisition.

Slaughter and May is acting as legal adviser to Nationwide in connection with the Acquisition.

Disclaimers

Information for Overseas Shareholders

Notice to Australian Virgin Money Shareholders

Share purchases

General

APPENDIX

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Certain of the following dates are subject to change (please see Note ( 1 ) below) :

The Court Meeting and the General Meeting will each be held at Jubilee House, Gosforth, Newcastle upon Tyne, England, NE3 4PL.

(1) These times and dates are indicative only and will depend, among other things, on the date upon which the Conditions are satisfied or, if capable of waiver, waived and the date on which the Court sanctions the Scheme. The timetable is also dependent on when the Court Order sanctioning the Scheme is delivered to the Registrar of Companies. Virgin Money will give notice of any updates or changes to these dates and times, when known, by issuing an announcement through a Regulatory Information Service and the ASX Market Announcements Platform and, if required by the Panel, posting notice of the change(s) to Virgin Money Shareholders and persons with information rights. Virgin Money Share Plan participants will be contacted separately to inform them of the effect of the Acquisition on their Awards.

• Virgin Money Share Account Holders are asked to submit their voting instructions for the Court Meeting in accordance with the instructions set out in the CSN Voting Notification as soon as possible, but in any event so as to be received by the Equiniti Nominee by no later than 1.00 p.m. on 15 May 2024 or, in the case of an adjournment, not later than five Business Days before the time and date set for the adjourned Court Meeting.
• Virgin Money Share Account Holders are asked to submit their voting instructions for the General Meeting in accordance with the instructions set out in the CSN Voting Notification as soon as possible, but in any event so as to be received by the Equiniti Nominee by no later than 1.15 p.m. on 15 May 2024 or, in the case of an adjournment, not later than five Business Days before the time and date set for the adjourned General Meeting.
• If either of the Shareholder Meetings is adjourned, the CDI Holder Voting Record Time for the relevant adjourned meeting will be 7.00 p.m. (AEST) on the date falling three Australian Business Days before the date set for that adjourned meeting.
• It is requested that blue CDI Voting Instruction Forms for the Court Meeting and white CDI Voting Instruction Forms for the General Meeting be lodged not later than 10.00 p.m. (AEST) on 17 May 2024 or, if either of the Shareholder Meetings is adjourned, not later than the time set out in the Notice of Court Meeting in Part 9 (Notice of Court Meeting) and in the notes to the Notice of General Meeting in Part 10 (Notice of General Meeting) of the Scheme Document, as applicable. In order for a Virgin Money CDI Holder to attend and vote in person at the Court Meeting or the General Meeting, such Virgin Money CDI Holder must choose Option B of the blue CDI Voting Instruction Form or the white CDI Voting Instruction Form (as applicable) and instruct CDN to appoint them as CDN's proxy. If a Virgin Money CDI Holder does not complete Option B in this way that Virgin Money CDI Holder will only be able to attend the Court Meeting or the General Meeting (as applicable) and speak but not be able to vote.
• It is requested that blue Forms of Proxy for the Court Meeting be lodged not later than 1.00 p.m. on 20 May 2024 or, if the Court Meeting is adjourned, not later than the time set out in the Notice of Court Meeting in Part 9 (Notice of Court Meeting) of the Scheme Document. Blue Forms of Proxy not so lodged may be handed to a representative of Computershare on behalf of the Chair of the Court Meeting or to the Chair of the Court Meeting at the commencement of the Court Meeting.
• It is requested that white Forms of Proxy for the General Meeting be lodged not later than 1.15 p.m. on 20 May 2024 or, if the General Meeting is adjourned, not later than the time set out in the notes to the Notice of General Meeting in Part 10 (Notice of General Meeting) of the Scheme Document. White Forms of Proxy cannot be handed to the Chair of the General Meeting at that meeting.
• If either of the Shareholder Meetings is adjourned, the Ordinary Shareholder Voting Record Time for the relevant adjourned meeting will be 6.00 p.m. on the date falling two Business Days before the date set for that adjourned meeting.
• To commence at 1.15 p.m. or as soon thereafter as the Court Meeting has concluded or been adjourned.
• For the purposes of the Condition set out in paragraph 2(C) of Part A of Part 3 (Conditions to and further terms of the Acquisition) of the Scheme Document, the "expected date" shall be the date which is no later than 14 calendar days after the satisfaction or (if capable of waiver) waiver of the Conditions in paragraphs 2(A), 2(B), 3 and 4 of Part A of Part 3 (Conditions to and further terms of the Acquisition) of the Scheme Document.
• Virgin Money CDI Holders who are on the CDI Register as at this time are entitled to receive the Consideration under the Acquisition.
• Scheme Shareholders who are on the register of members of Virgin Money as at this time are entitled to receive the Consideration under the Acquisition.
• The attention of Virgin Money Shareholders is drawn to paragraph 14(A) of Part 2 (Explanatory Statement) of the Scheme Document which provides details on the currency in which payments will be made as well as instructions for any Virgin Money Shareholder who wishes to amend their payment instructions.
• Following the receipt by the Computershare Nominee of the Consideration due to it in respect of the Virgin Money Ordinary Shares it holds on behalf of the Virgin Money Share Plan Account Holders, the Computershare Nominee will distribute to the Virgin Money Share Plan Account Holders the relevant portion of the Consideration to which they are entitled within five calendar days thereafter.
• Following the receipt by the Equiniti Nominee of the Consideration due to it in respect of the Virgin Money Ordinary Shares it holds on behalf of the Virgin Money Share Account Holders, the Equiniti Nominee will distribute to the Virgin Money Share Account Holders the relevant portion of the Consideration to which they are entitled within ten Business Days thereafter, and issue Virgin Money Share Account statements within five Business Days after the date on which the Equiniti Nominee distributes the Consideration to the Virgin Money Share Account Holders.
• This date may be extended to such date (a) as Virgin Money and Nationwide may agree, or (b) (in a competitive situation) as may be specified by Nationwide with the consent of the Panel, and in each case that the Court (if required) may allow.

(*) These references to "D-2" or "E+1" are to the day falling two Australian Business Days before the actual date which is D or one Australian Business Day after the actual date which is E, respectively.

(**) In the context of the Effective Date, reference to "D+1" is to the day falling one calendar day following the actual date which is D.

(***) These references to "D+1" or "E+1" are to the day falling one Business Day following the actual date which is D or E, respectively.

All references in this announcement to times are to times in London, UK (unless otherwise stated).