Newcastle bank Virgin Money has revealed a 10% pay rise for most of its 7,500 staff as it reported a 43% hike in annual profits.
The group - which has offices in Newcastle, Leeds and Glasgow - said it was giving staff a rise of between 9% and 11%, as well as a £1,000 cost-of-living payment in August. The bank said it thought the package was ‘sector leading’.
The company said that, alongside the staff pay boost, it has launched a cost-of-living hub to help offer support to customers in financial distress but said it has not yet seen signs of an increase in borrowers falling behind with their repayments.
Read more: North East unemployment falls to record low
But the lender stressed it was “carefully monitoring” its customer base and set aside £52m to cover borrower defaults as the UK faces a prolonged recession due to the cost-of-living crisis. The group also said it was seeing the impact of rocketing inflation on banking customers, with its data showing spending has soared by 16% on groceries and 57% on energy bills.
Virgin Money chief executive David Duffy said the bank had returned a “pretty strong result in a difficult environment”.
He said: “2022 has been a milestone year for Virgin Money. We have good momentum while delivering a strong performance and improved returns for our shareholders. We’ve changed the game in purpose-led flexible working to create an engaged, high-performing organisation that’s cost efficient and agile, which will underpin targeted growth through further digital innovation.
“While we have solid credit quality across our lending, we are aware that some customers will have to make difficult decisions in this environment, and we are proactively offering them help and support.”
In full year results for the period to September 30, total underlying operating income increased 12% to £1.755bn. Underlying pre-tax profits fell slightly to £789m, down 1% from £801m the previous year, but statutory profit on ordinary activities before tax went up from £417m to £595m.
Mr Duffy announced a dividend of 10p per share, plus an additional share buy-back of £50m, taking that programme to £125m.
He added that the the bank would be looking in the current year at what it would do with the portion at its Newcastle office that it last year closed as it moved to a more flexible working model. But it said the site on Tyneside remained “core” to its operations and it had “no negative plans” for the site.
READ NEXT:
