Challenger bank Virgin Money could start paying dividends as soon as the middle of this year, chief executive Jayne-Anne Gadhia told City A.M. yesterday.
Virgin announced operating profits of £121.2m for 2014, more than double the £53.4m recorded in 2013. However, its statutory profits slumped to £34m – 2014’s figures include the costs of its stock market flotation and the associated £50m payback to the Treasury under the deal struck when Virgin Money bought the Northern Rock assets.
Mortgage balances increased 11.8 per cent over the year to £21.9bn, while net lending rose £2.3bn, representing 10.2 per cent of bank lending growth in the year.
“We intend to declare a dividend this year, and it is possible that you’ll see that at the half-year,” said Gadhia. “It gives people confidence about our capital position, about our regulatory position. And when we move in time from a growth stock to an income stock, then the dividend is even more important.”
Virgin launched its current account offering last year, with a free account offered in store across Scotland and Northern Ireland. It plans to roll that out to England and Wales by Easter, before launching a digital account in the summer.
Its shares rose 5.02 per cent.