Boss pressured

Duffy faces investor backlash as Virgin Money slips

David Duffy
David Duffy: remains positive

Virgin Money boss David Duffy is coming under pressure after Britain’s sixth-biggest bank turned in a hefty provision for bad debts and rising costs.

The Glasgow-based bank posted a 42% plunge in annual statutory profits to £345 million and said it had set aside an additional £309 million to cover a potential hit from unrecoverable loans.

Investors responded to the weaker figures by sending Virgin Money’s shares down by 10.25p, or 6.5%, to 146.75p.

Chief executive Mr Duffy has been in charged of what was formerly Clydesdale Bank and Yorkshire Bank since 2015 when he was brought in by its then parent National Australia Group. He led a demerger and its sale in 2018 to Virgin Money whose brand it adopted.

However, performance has slipped and investors were rattled by yesterday’s disappointing figures, some going so far as to question Mr Duffy’s future.

Gary Greenwood, from brokerage Shore Capital, said: “Virgin Money’s poor track record of meeting expectations means it may struggle to re-rate in the near term without a change of leadership.”

Underlying earnings slumped 24% to £593m, compared with a forecast of £625m by analysts in a company-compiled consensus. The bank also announced an additional share buyback plan of £150m.

Mr Duffy put a more positive spin on the figures an its outlook. “We made good progress executing our strategy in 2023, growing both our relationship customer base and target lending segments,” he said.

“With the momentum we carry into 2024, we are confident in the outlook for our business and we expect to deliver around £800m in distributions to our investors by the end of the three-year period ending in 2024.

“Under the Virgin brand, our ambition is to create the UK’s best digital bank. To help achieve this goal, we are stepping up investment in our technological capability to future proof our business and protect our customers from the growing risk of fraud strategies driven by advances in AI.”

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