Challenger bank Virgin Money has announced plans for an initial public offering this month, committing to a progressive dividend policy in the process.
The firm, which purchased bailed-out bank Northern Rock in 2012, will list on the London Stock Exchange in October.
The float, which aims to raise £150m, will not be accessible to private investors.
Virgin Money said it aims to use the capital to fuel further growth plans, bolster capital, provide suitable incentives to staff and fund other corporate activity.
It will also pay the Treasury £50m, which will bring the total paid for Northern Rock to £1.2bn. Each employee will receive £1,000 worth of shares in the business upon flotation.
It also laid out plans for a dividend policy, including the goal of paying a dividend in its first financial year following admission to the FTSE. The firm said: "The company's objective is to support dividend distributions in line with the larger, listed UK banks once the business has grown its earnings base and balance sheet."
The company is targeting a payout ratio of 10%-20% after tax, less any coupons payable on Additional Tier One securities.
Virgin Money chief executive Jayne-Anne Gadhia (pictured) said: "Over the last three years we have transformed our business. We have expanded our product range, increased our customer numbers, grown our balance sheet and enhanced our profitability. Our decision to take the business public marks just how far the company has come.
"Our capability to deliver growth at meaningful scale, the quality of our balance sheet and our absence of legacy issues makes us stand apart from other banks, and these strengths give us the potential to deliver ongoing returns to our shareholders through both capital growth and progressive dividend payments."
