Virgin’s banking arm, estimated to be worth £2 billion by city insiders, is set to be floated on the financial markets later this year, with some hinting that the launch will come as early as October.
Richard Branson’s banking firm has been performing strongly this year, with the launch of a new current account in Scotland and Northern Island as a pre-tester before making it available in the rest of the UK.
The firm also reported profits last year of £53.4 million, a steep rise over the loss of £2.5 million the previous year.
Virgin will become the third challenger bank to sell shares on the stock market this year. The emergence of challenger banks in the UK comes at a time when financial competitiveness has become a priority for reform in the high street banking industry.
Earlier last month, challenger bank Aldermore announced plans to launch an initial public offering (IPO) – with expectations that the IPO would raise between £400 million and £500 million.
The Virgin Group currently owns 46.5% of Virgin Money, and expects to retain a sizeable portion of shares after the initial floating takes place – which is being handled by Bank of America Merrill Lynch and Goldman Sachs.
Branson has in the past expressed Virgin’s desire to gain entry to the alternative finance market, with an announcement earlier this year of a significant investment into ‘anti-bank’ start-up TransferWise. The start-up offers international monetary transfers without significant fees attached.
Photo source: Jezz Rizzo via Flickr
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