Bonus boost for Virgin Money staff

The Virgin Money Lounge in Castle Street, Norwich. Picture: Denise Bradley

The Virgin Money Lounge in Castle Street, Norwich. Picture: Denise Bradley - Credit: Copyright: Archant 2012

Virgin Money has more than doubled its profits in the mortgage lender's first set of annual results since it floated last year.

The company also announced that all staff below executive level will receive a 'share in success' pay-out worth 7% of their salaries, adding to their normal bonus awards and the £1,000 of shares that all employees received on listing.

Newcastle-based Virgin, which made its stock market debut last November, said pre-tax profits stripping out one-off items grew 127% to £121.2 million in 2014. Shares rose 3%.

However statutory profits fell sharply from £185.4 million to £34 million, when costs including £12.6 million for the float, as well as the gain from the sale of a subsidiary in 2013, were included.

The group also set aside £36 million for its final £50 million payment to the Treasury for its purchase of Northern Rock.

Virgin, which employs about 200 people at Whiting Road, Norwich, said mortgage balances grew to £21.9 billion, an increase of 11.8% compared to market growth of 1.4% while retail deposit balances improved 6% to £22.4 billion.

The group said it accelerated lending in the second half of the year following guidance on the strength of its balance sheet from the Bank of England's Prudential Regulation Authority (PRA).

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Gross mortgage lending was £5.8 billion in 2014, with a market share of 3.1% in the second half of the year.

It said it planned to continue achieving a share of more than 3% 'despite an increasingly competitive market environment'.

The EDP Top100 firm said it was 'uniquely placed' to offer effective competition to the larger banks and looked forward to the outcome of the current competition probe into the sector.

It expects to be admitted to the FTSE 250 Index later this month.

Chief executive Jayne-Anne Gadhia said Virgin had 'made great progress' during the year and now ranked in the top six of all UK net mortgage lenders.

She added: '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 on top off their normal bonus awards, to add to the £1,000 of shares that all employees received on listing.'