Virgin Money IPO to go ahead as market conditions settle

The Newcastle-based lender hopes its shares will be trading on the London Stock Exchange before the end of this month. The company is selling about a quarter of itself in a move expected to value it at nearly £2bn.

As well as more stable market conditions, Virgin has been boosted by new standards on financial health set by the Bank of England on Friday.

Virgin said it was operating above the recommended requirements of the Bank’s proposed leverage ratio, which defines how much capital banks hold as a proportion of their loans.

The lender employs more than 2,500 staff, with 1,700 based in 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.

Virgin, which provides mortgages, savings and credit cards to 2.8 million customers, bought former failed lender Northern Rock from the Government for an initial £820m.

The flotation will result in another £50m being returned to the taxpayer, taking the total paid to the Treasury to £1.02bn. Each employee will be also be awarded £1,000 worth of shares.

Chief executive Jayne-Anne Gadhia said: “Access to the public capital markets has been a long-term strategic objective for Virgin Money and we are now ready to take this important step forward for our business.”