Virgin Money has unveiled its first buyback programme, with lender set to repurchase up to £75million worth of shares
The group said it would buy back shares with an initial repurchase of ordinary shares at £0.10 each.
The buyback is expected to start on 30 June and will end no later than 17 December, Virgin Money said.
Announcement: Virgin Money announced a fresh share buyback programme today
Virgin Money shares jumped today, and were up 5.54 per cent or 7.10p to 135.35p in early morning trading, having fallen by around 30 per cent over the past year.
David Duffy, Virgin Money’s chief executive, said: ‘As Virgin Money continues to deliver against its strategic objectives and maintain a strong capital base, I am pleased to confirm the launch of our inaugural share buyback programme.
‘Buybacks will play a significant role in the capital return policy we announced in May, as the Company targets profitable growth and distributes excess capital. Today’s announcement marks an important step in that journey.’
He added: ‘As the Company executes its strategy to improve statutory profitability, drive growth, and enhance capital returns, the buyback programme will play an important role in delivering value for shareholders.
‘Virgin Money set out its updated capital framework and approach to shareholder distributions at its interim results on 5 May 2022, outlining a 30 per cent full year dividend pay-out, supplemented with buybacks, subject to an ongoing assessment of surplus capital, market conditions and regulatory approval.
‘Following Prudential Regulation Authority approval and with continued robust levels of capital, today’s buyback announcement supplements the 2.5p interim dividend in line with our announced framework.’
In May, the FTSE 100-listed lender reported ‘good progress’ in its half-year results with underlying pre-tax profit up by over 50 per cent.
The bank reported an underlying pre-tax profit of £388million for the six months to 31 March, up 58 per cent from £245million in the first half of last year.
Total underlying operating income increased to £865million, from £743million the year before.
Underlying costs of £456million were 1 per cent lower year-on-year, with expected cost savings from ongoing digital transformation and restructuring offset by inflation.
The bank’s branch footprint also fell by 20 per cent since the end of the 2021 financial year.
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