High street lender Virgin Money has become the latest bank to confirm its plans to list in London. The bank, part-owned by planes to trains tycoon Sir Richard Branson, is to raise £150 million from an initial public offering (IPO) that could value the business at some £2 billion.

This deal was highlighted in one of Shares' cover stories last month and on its IPO microsite.

Shares in the mortgage, savings, insurance and current account provider are expected to start trading later this month when 25% of the bank will be sold. The proceeds will fund growth, boost recruitment and strengthen capital buffers.


Dividends will be paid from 2015 where the bank targets an initial pay-out ratio of 10% to 20% of pre-tax profits.

Virgin Money Storefront

Unlike the debuts of the Royal Mail (RMG) and holiday and insurance play Saga (SAGA) there is no retail offering for the IPO. However, private investors can still take part by asking a broker to place an order on their behalf with one of the bookrunners.

This is the fourth banking IPO to have been announced this year. Lloyds Banking’s (LLOY) offshoot TSB (TSB) floated in June (25), two weeks after OneSavings Bank (OSB) listed. Aldermore confirmed its plans to go public last month (22 Sept).

wEB - tsb - 2 oCT 2014

Virgin Money serves 2.8 million customers through 75 branches. It formerly traded as Northern Rock but changed its name after a Branson-led consortium bought the struggling business from the tax-payer in 2011. The bank will have to pay £50 million to the government following an agreement that the tax-payer will benefit from a successful IPO.

Issue Date: 02 Oct 2014