Virgin Money has reported a 356 per cent increase in underlying profit before tax to £59.7m in a half-year trading update released this morning.
The company also confirmed that Glen Moreno would take over as chairman of the company from mid-2015.
Profit before tax was down by 97 per cent, but this was partly the result of IPO-related expenditure, explicitly:
[A] charge of £16.6m in FSCS levies and a £26m change in the provision for contingent consideration payable to HM Treasury in the event of a successful, profitable IPO of the business between 2012 and 2016.
An IPO therefore looks likely sometime in 2015, with these provisions reflecting " the view of the company's board of the possibility of an IPO."
Alongside the mammoth increase in underlying profit before tax, Virgin Money said its total income had risen 28 per cent to £210m from £163.7m. The fall in profit before tax was also affected by tough comparisons after the sale of its credit card subsidiary to MNBA generated a £202m gain in the first half of 2013.
Change at the top
Moreno will take over from Sir David Clementi, who has been with the company since October 2011. He is currently chairman of Pearson, the multinational publishing and education company.
I have huge admiration for the way in which Virgin Money has continued to act as a voice of competition in the banking sector. The bank's strategy has delivered sustainable, responsible growth and a strong return to profitability.It is now one of the best performing challenger banks and I look forward to joining Virgin Money at such an exciting time.
Virgin Money, as it is now, was built from the purchase of Northern Rock in 2012.
Chief executive officer Jayne-Anne Gadiha was keen to emphasise the company's responsible approach and strong balance sheet:
Looking to the future, we are not burdened by the historical conduct and legacy challenges that face many incumbent banks.We have a powerful brand, a strong balance sheet, a strong core business franchise and through our ambition to make ‘everyone better off’, a clear set of values that live throughout our business.For all these reasons, we remain confident that we can continue to make real progress on our quest to make banking better and can continue to grow our business strongly, profitably and responsibly.