Newcastle head-quartered Virgin Money has announced strong first half results, indicating an imminent IPO, writes Anna Milne.
A reported £26m ($42.2) change in the provision for HM Treasury contingent consideration points to the event of an IPO before 2016.
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Further roll-outs of current accounts are also imminent, with the Essential account finally to be extended beyond Northern Ireland and Scotland, although the bank would not confirm when.
"The intention was always to roll it out, we’ve had good feedback from customers," said Simon Hall at Virgin Money Corporate Communications.
Hall added: "Virgin’s approach to current accounts is careful and controlled and was started by running a staff trial internally before launching on a regional basis."
The roll-out of current accounts with features beyond the basics, for example a cheque book, online transactional possibilities beyond balance checks and overdraft facilities; perhaps Virgin train discounts applied to fares at times of day people actually travel.
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By GlobalData"We continue to look for opportunities to enhance the service we provide to customers and to build further on the growth we have achieved thus far," said Jayne-Anne Gadhia, chief executive officer of Virgin Money.
For a bank not burdened by legacy issues, Virgin Money should power full steam ahead into digital banking channels, not least due to its affinity with Richard Branson’s other little enterprise: internet provision.
Richard Branson’s part-owned bank reported a pre-tax profit of £59.7m, an increase of 356% since the first half 2013.
However, statutory profit before tax was £6.7m due to £16.6m paid in FSCS levies as well as the HM Treasury provision.
A £202m gain from sale of credit cards subsidiary to MBNA positively impacted statutory profit before tax. Underlying net interest margin increased by 33 basis points to 1.43% year-on-year.
In January 2014, Metro Bank delayed plans for an IPO until 2016, to "maximise value" by raising funds privately due to strong demand from investors and institutions.
RBS has announced plans for a US IPO by selling a 25% stake in the Citizens Financial Group and in June 2014, TSB floated on the London Stock Exchange as a condition of Lloyds’ bailout in 2008.
Virgin Money also announced the appointment of Glen Moreno as chairman, subject to regulatory approval. Moreno will replace David Clementi mid-2015 and will join as non-executive director and chairman designate as of January 2015.
