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Virgin Money restores dividend as CEO pay doubles

Virgin Money

Virgin Money: sees growth in margin (pic: Terry Murden)

Virgin Money has reinstated its dividend as a return to profit saw the pay and benefits package of its CEO more than double to £2.7 million.

David Duffy’s remuneration for the year to the end of September is his second highest since Virgin floated on the London Stock Exchange in 2016.

He received £1.35 million last year. It has been boosted by the vesting of a share-based incentive scheme from 2018, according to the bank’s annual report, released yesterday.

The bank has reinstated its dividend and is forecasting continued margin growth next year.

Pretax profit for the year to the end of September came in at £417 million, compared to a £168 million loss in the previous 12 months.

Virgin Money, the rebranded business following its acquisition by the owner of Clydesdale and Yorkshire banks, recorded a £131m benefit for credit exposures, after booking a £507m provision the year before.

Its loan book ended the period at £72 billion, which was a slight fall because of a 5.3% drop in lending to businesses.

The net interest margin improved to 1.62% from 1.56% and it expects continued margin growth, with its NIM rising to 1.7% in the nexst financial year. The underlying cost-to-income ratio improved to 57% from 59%.

Chief financial officer Clifford Abrahams said: “I’m pleased to report a significant strengthening in the operating performance of the business with a return to statutory profit in financial 2021 and good financial momentum as we accelerate delivery of our Digital First strategy.”

The bank is recommending a 1 pence final dividend.

Virgin Money shares closed 5.8p (3.2%) lower at 176.3p.

Legal action

Campaigners pursuing a legal action against Clydesdale Bank and its former parent, National Australia Bank Limited over the sale of fixed rate loans known as Tailored Business Loans criticised Virgin for making no reference to the claim.

James Hayward, CEO of claims vehicle RGL Management said: “Today, once again, Virgin Money showed its contempt for the hundreds of small business customers it treated unlawfully by making no mention of their major High Court claim in its Full Year reporting. Given its historic treatment of affected customers, this is not surprising.

“We remain absolutely confident in bringing this case to a successful conclusion and securing the hundreds of millions of pounds in compensation owed to claimants.”

Clydesdale Bank has denied any wrongdoing and said it will contest any action against it.

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