The bank built on Rock

2 October 2014 By Dominic Elliott

The Richard Branson-backed lender would be the fourth of up to a dozen UK bank floats. Virgin has done a lot with Northern Rock assets bought from the state in 2012. But needed diversification away from mortgages is embryonic. An IPO just now suits owners more than new investors.

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Virgin Money, the UK bank that in 2012 bought the good assets of bailed-out lender Northern Rock, said on Oct. 2 that it was planning to raise 150 million pounds ($242 million) in an initial public offering.

In addition to new shares, the offer will include stock being sold by Virgin Financial Investments Limited, funds managed by buyout firm WL Ross & Co, and members of the senior management team.

The bank said it would use part of the proceeds to repay 50 million pounds still owed to the UK government. Virgin Money has already provisioned for 40 million pounds of that payment. In total, Virgin Money will have repaid 1.02 billion pounds to the UK government for the acquisition.

Virgin Money said it made an underlying profit of 59.7 million pounds in the first half of this year, against 53.7 million pounds for the whole of 2013.

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