Employees at North East-base bank Virgin Money have moved a step closer to a windfall of shares after the business issued a fresh timetable for its flotation plans.
The Newcastle-headquartered bank recently temporarily delayed its Stock Exchange flotation amid turmoil in the financial markets.
However, a market note to update shareholders details how the bank has revived its flotation bid on the back of a strong trading update and clarity from the Financial Policy Committee, stating it would list before the end of this month.
Upon flotation, all permanent employees – with the exception of directors and senior management – will be awarded £1,000 of shares.
Staff members have to be employed on the IPO date and stay with the business for one year, at which point the shares will be transferred to them.
The company said a recent survey revealed the staff’s engagement score was 86% and that staff turnover was 6.5% in 2013, much lower than the industry average of 16%.
The firm said: “The objectives of the scheme are to reward employees for their hard work and loyalty which have enabled the company’s success and to give all employees a stake in the future success of Virgin Money.”
In October, slow growth in the US, Germany and China had combined with global uncertainty surrounding the spread of Ebola, the war against Isis and Russian sanctions over Ukraine to create what was described as a “perfect storm” in financial markets.
Such uncertainty led Virgin Money, which employs more than 2,500 staff, with 1,700 people based at Gosforth, Newcastle, and another 200 at Norwich, to put off its planned October IPO.
Now, however, Jayne-Anne Gadhia, chief executive officer, has announced plans to float this month.
She said: “Our business performance remains strong and on Friday we published our Q3 trading update which demonstrates our continued growth momentum.
“We welcome the clarity provided by the Financial Policy Committee on the leverage ratio, and are pleased to note that we operate in excess of the recommended requirements.
“Given this and given more stable market conditions, we now plan to move forward with our IPO with the aim of being admitted by the end of November.
“Access to the public capital markets has been a long-term strategic objective for Virgin Money and we are now ready to take this important step forward for our business.”
The bank, which has its headquarters in Newcastle, first confirmed its flotation intentions in October, with the Treasury set to get £50m from the deal.
Staff at the bank will each get £1,000 worth of shares.
The decision to float means the bank will have handed over £1bn to the Government, with chief executive Mrs Gadhia saying the latest financial contribution means the taxpayer would not be losing out from its 2007 bail-out of Northern Rock.