Irishman David Duffy’s pay package doubles to £2.75m at Virgin Money

David Duffy, the Irish chief executive of UK lender Virgin Money, saw his remuneration more almost double to £2.75 million (€3.27 million) in the company's financial year to the end of September, as it swung back into profit and confirmed a return to paying dividends.

The package was driven by £1.37 million of share awards tied to a long-term incentive plan that was set up in 2018, as well as a £140,000 bonus, according to the company’s annual report, published on Wednesday.

The basic salary of Mr Duffy, who left AIB in 2015 to head up Virgin Money's predecessor, CYBG, was unchanged at £1.02 million. At AIB, Mr Duffy's pay was capped at €500,000 under restrictions tied to the bank's bailout during the financial crisis, which remain in place.

CYBG acquired Virgin Money in late 2018 and rebranded the entire business under the Virgin brand.

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The Glasgow-headquartered lender confirmed on Wednesday that it had returned to profitability in its latest financial year, with a pretax surplus of £417 million, compared to a loss of £168 million for the previous 12 months.

The result was helped as Virgin Money released £131 million of bad-loan provisions, having set aside £507 million last year as lenders globally fretted about the impact of Covid-19 on borrowers’ ability to repay loans.

"Given the stronger financial performance in the year, it is pleasing to be able to return to paying a dividend with the board declaring 1p in respect of 2021, subject to shareholder approval," group chairman David Bennett said in the report. "The group remains well capitalised, with a strong funding and liquidity position, to deliver on our ambitious strategic plan."

Close branches

Virgin Money said in September that it planned to close almost one in five of its 162 branches.

It followed up three weeks ago by outlining that it aims to cut £175 million from its costs over the next three years as it accelerates its digital-first strategy. However, restructuring expenses incurred over the period would amount to £275 million .

Mr Bennett added: “As we start to exit from the pandemic, with an improving economic backdrop, Virgin Money has an exciting opportunity through our strategy to simplify the bank and accelerate our growth aspirations. The board believes that our strategy is the right one and with a strong 2021 performance as a foundation, Virgin Money is well positioned to deliver profitable growth, in a cost effective and sustainable way.”