More than 200 Virgin Money staff in Scotland are to receive a “share in success” bonus worth about £1,700 each after profits at the Edinburgh-based lender more than doubled last year.
In its first set of annual results since floating in November, the bank said underlying pre-tax profits soared 127 per cent to £121.2 million for 2014, helped by strong growth in mortgage and credit card lending.
All staff below executive level, totalling almost 3,000 people, will receive a special payout worth 7 per cent of their salaries, adding to their normal bonus awards and the £1,000 of shares that all employees received when the firm listed.
Virgin Money, which was valued at about £1.25 billion when it made its stock market debut in November, employs almost 200 people at its headquarters in Edinburgh. It also has branches in Aberdeen, Dundee, Giffnock and Glasgow.
Chief executive Jayne-Anne Gadhia said: “Our staff are at the heart of Virgin Money and I would like to thank them for their hard work throughout what has been a landmark year for the business. I am pleased we are able to reward all eligible employees with a share in success bonus.”
Shares in the lender have risen well above the initial public offering price of 283p and are poised to be admitted to the FTSE 250 Index later this month.
Numis analyst Mike Trippitt said yesterday’s maiden results were ahead of the broker’s forecast, as lower retail funding costs helped improve the bank’s net interest margin – the difference between the interest charged on loans and paid on customer deposits – to 1.5 per cent, up from 1.26 per cent in 2013.
However, Ian Gordon at Investec said the figure “compares unfavourably” with rival TSB, which last month reported a net interest margin of 3.62 per cent.
Gordon added: “This is primarily a function of the materially higher price that Virgin Money pays for its retail funding – partially reflecting the absence of a current account ‘anchor’ product, but also the fact that it is ‘paying up’ to attract incremental flows to fund loan growth.”
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