Virgin Money, which is partly-owned by billionaire investor Richard Branson and is planning an initial public offering (IPO) for next year in the London Stock Exchange, announced that Glen Moreno will take over as Chairman from Sir David Clementi in the middle of 2015. In January 2015, Mr. Moreno will become an Independent Non-Executive Director and Chairman Designate.
In a press release today, Virgin Money said Mr. Moreno’s appointment is still subject to regulatory approval.
Mr. Moreno, who was born in California, is currently chairman of the London-based, multinational publishing and education company Pearson plc. He is also a non-executive director of Fidelity International Ltd.
According to Virgin Money, Mr. Moreno has more than forty years’ experience in business and finance, and has held the following positions during his career:
- Deputy Chairman: The Financial Reporting Council,
- Senior Independent Director: Lloyds Banking Group plc,
- Senior Independent Director: Man Group plc,
- Acting Chairman: UK Financial Investments Ltd (set up by HM Treasury to manage the govt’s shareholdings of British banks).
Regarding his new post, Mr. Moreno said:
“I have huge admiration for the way in which Virgin Money has continued to act as a voice of competition in the banking sector. The bank’s strategy has delivered sustainable, responsible growth and a strong return to profitability. It is now one of the best performing challenger banks and I look forward to joining Virgin Money at such an exciting time.”
Sir David, who said that Mr. Moreno’s appointment to Virgin Money’s Board is a long-term succession plan, became Chairman in October 2011, and committed to service three years.
“During that time the company has successfully gone through the biggest transition in its history following the acquisition of Northern Rock. I am proud of what the company has achieved and look forward to working with Glen in the coming months before I hand over the Chairmanship to him. I have agreed to remain in office for a further nine months before handing over to Glen,” Sir David added.
Glen Moreno starts his tenure in 2015.
H1 2014 Trading update
During the first six months of 2014, Virgin Money reported strong profit growth and returns:
- Underlying pre-tax profit £59.7 million, compared to £13.1 million in H1 2013,
- Total income £210 million, a 28.3% increase on £163.7 million for the same period last year,
- Underlying net interest margin 1.43%, from 1.1% in H1 2013,
Virgin Money is a challenger bank, a high-street start-up fighting against the UK’s big four banks.
- Underlying return on tangible equity 6.2%, up from 1.5% in H1 2013,
- Statutory cost:income ratio 70.9%, a 12.5 percentage-point improvement from 83.4% in H1 2013.
The company says it is on target to launch its own credit card business in H2 2014. The aim is to expand the credit card book to £3 billion by 2019.
Gross mortgages grew by 3.7% to more than £20 billion, compared to £19.6 billion on December 2013.
Virgin Money’s CEO, Jayne-Anne Gadhia, said regarding H1 2014 results:
“Strong revenues, driven by mortgages and savings, combined with improving net interest margins and controlled cost growth, have resulted in an improved underlying return on tangible equity of 6.2% for the first half of 2014.”
“Despite the investment in building our capabilities and associated infrastructure our cost income ratio has continued to decrease. Similarly, the growth in our mortgage and credit card businesses has not been at the expense of asset quality, as we maintain our rigorous approach to underwriting and risk management.”
Ms. Gadhia pointed out that the company is not burdened with the historical conduct and legacy problems that are so common among most other British banks. The company has a powerful brand, a strong core business franchise, as well as a solid balance sheet.
“For all these reasons, we remain confident that we can continue to make real progress on our quest to make banking better and can continue to grow our business strongly, profitably and responsibly,” she added.
