THE new high street bank formed by Virgin Money’s £747m takeover of Northern Rock could list on the stock market within two years, according to reports.
The flotation of the bank would reportedly release a payment of between £50m and £80m to the Government and deliver lucrative rewards for Sir Richard Branson’s Virgin Group.
After making an anticipated loss next year, the bank is expected to be profitable by 2013 and in a position to consider a float if conditions permit.
If the listing takes place within two years, a payment of around £80m will be made to the public purse, while a less speedy listing which takes five years or more would deliver a £50m return for the Government.
Meanwhile, the Rock’s new owner has moved to allay fears that taxpayers will make a significant loss on their ownership of the formerly nationalised business.
The Government sold Northern Rock for an initial £747m – just half the amount that taxpayers injected into the bank last year – prompting claims from some quarters that the deal would leave taxpayers out of pocket.
According to Gadhia, on top of the initial £747m takeover payment and the funds which will come when the company is listed, there will be some additional payments to the public purse in the coming months.