Staff and taxpayers big winners in Virgin Money float
Virgin Money announced details of its long-awaited stock market flotation today.
The move will see £50 million returned to the taxpayer following its agreement to buy Northern Rock in 2011, while each employee will be awarded £1,000 worth of shares.
Shares in the lender, which provides mortgages, savings and credit cards to 2.8 million customers, are expected to begin trading this month. The business is reportedly expected to be valued at up to £2 billion.
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Company has come far
Chief executive Jayne-Anne Gadhia said: "We are delighted to be announcing our intention to float Virgin Money.
"Over the last three years we have transformed our business. We have expanded our product range, increased our customer numbers, grown our balance sheet and enhanced our profitability.
"Our decision to take the business public marks just how far the company has come.
"In addition, and in recognition of their hard work to-date and their contribution to the future value of the business, I am also delighted to announce that each employee will be awarded £1,000 worth of shares in the business upon flotation."
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Rising from Northern Rock's ashes
The bank bought former failed lender Northern Rock from the Government for an initial £820 million.
Virgin said the latest contribution as a result of the flotation would take the total paid to the Treasury to £1.02 billion.
The lender employs more than 2,500 staff, with 1,700 based in Gosforth, Newcastle, and 200 in Norwich. It is owned by Sir Richard Branson's Virgin Group, Wall Street billionaire Wilbur Ross and an Abu Dhabi investment fund.
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Flotation to raise £150m
Last month it said underlying profits jumped to £59.7 million in the first six months of the year, from £13.1 million a year earlier.
The flotation is expected to raise £150 million.
Virgin Money said it was unencumbered by the legacy of past banking scandals that are still haunting other lenders and was "uniquely placed to provide effective competition to the large incumbent banks in the UK".
Its entry into the stock market follows the flotation of TSB, which was spun off from Lloyds Banking Group. Meanwhile, Royal Bank of Scotland is spinning off hundreds of branches under its plans to revive the Williams & Glyn brand.
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