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Newcastle Virgin Money staff in share windfall

Virgin bought Northern Rock after its collapse in 2011 Credit: PA

1700 Virgin money staff based in Newcastle will be awarded £1,000 worth of shares after the firm announced details of its long-awaited stock market flotation. The move will also see £50 million returned to the taxpayer following its agreement to buy Northern Rock in 2011. Shares in the lender, which provides mortgages, savings and credit cards to 2.8 million customers, are expected to begin trading this month. The business is reportedly expected to be valued at up to £2 billion.

The bank bought former failed lender Northern Rock from the Government for an initial £820 million. Virgin said the latest contribution as a result of the flotation would take the total paid to the Treasury to £1.02 billion.

The lender employs more than 2,500 staff, with 1,700 based in Gosforth in Newcastle, and 200 in Norwich. It is owned by Sir Richard Branson's Virgin Group, Wall Street billionaire Wilbur Ross and an Abu Dhabi investment fund. Its Chief Executive says she's delighted to offer staff the share award.

"We are delighted to be announcing our intention to float Virgin Money. 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. In addition, and in recognition of their hard work to-date and their contribution to the future value of the business, I am also delighted to announce that each employee will be awarded £1,000 worth of shares in the business upon flotation."

– Jayne-Anne Gadhia, Chief Executive

Northern Rock closure is a 'huge loss' for the region

Responding to news that the Northern Rock Foundation will close its current grant programmes at the end of 2014 and begin to prepare for the Foundation’s now likely eventual closure, Chi Onwurah, MP for Newcastle Central, has spoken to ITV Tyne Tees.

She says Northern Rock's investment in local projects and charities was a "great example for the country".

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Newcastle MP 'concerned' after Northern Rock closure

Responding to news that the Northern Rock Foundation will close its current grant programmes at the end of 2014 and begin to prepare for the Foundation’s now likely eventual closure, Chi Onwurah, MP for Newcastle Central said:

I’m very sad to see the demise of Northern Rock as a grant giving organisation. It has made a remarkable contribution to the North East for many years now and has been a caring, innovative, inclusive and supportive friend to the North East, rooted in our region and working in our region.

I do however welcome Virgin Money’s commitment to investment in the region. Youth services have been devastated by central government funding cuts and housing is consistently the number one issue in my surgeries and post bag, so their support for North East Youth Zones and bringing empty housing back into use is very welcome.

I am concerned however that the work the Foundation undertook on hard to reach communities, inclusion and refugees will not be replaced and will leave a gap in the region.

– Chi Onwurah, MP for Newcastle Central

What is the Northern Rock Foundation?

The Northern Rock Foundation is a charity and company limited by an independent Board of Trustees that makes all decisions on governance, finance and policy.

The Foundation aims to tackle disadvantage and improve quality of life in the North East of England and Cumbria.

The Foundation’s work is delivered by a professional staff team of 10 based in Newcastle uponTyne.

Sadly, after 17 years it will close its programmes at the end of this year and prepare for "now likely eventual closure".

Trustees have 'no funding routes left to pursue'

After 17 years of grant making, Northern Rock Foundation will close its current grant programmes at the end of 2014 and begin to prepare for the Foundation’s now likely eventual closure.

Trustees believe there are now "no funding routes left to pursue" after Virgin Money offered the Foundation £1m per year for five years, which had to be matched by the Foundation raising £3m per year from the private sector. But even this was not a "viable option" for the Foundation.

The Foundation’s remaining funds will be used to achieve long term positive impact on the lives of children and young people in the region, and also to support the development and sustainability of voluntary organisations.

BREAKING: The end of the Northern Rock Foundation

The Northern Rock Foundation has confirmed that after 17 years it will close its programmes at the end of this year and prepare for "now likely eventual closure".

In May 2014 Virgin Money offered £1 million per year for five years to Northern Rock Foundation, to be matched by the Foundation raising £3 million per year from the private sector locally. It was decided that this was not viable.

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Virgin Money to create 200 jobs after Osborne's visit

George Osborne speaking at Virgin Money's site in Newcastle.
Can I help you? The Chancellor was shown the ropes at Virgin Money's branch in Newcastle city centre.
The Chancellor chatting to Virgin Money staff.
Something to smile about: Virgin Money has announced it will pay the Treasury a further £154.5 million.

Virgin Money has announced that it will create 200 new jobs, 120 of which will be based in the North East.

The announcement was made earlier today when the Chancellor, George Osborne, visited Virgin Money's site in Gosforth, Newcastle. The visit also included a tour of the bank's high street branch in Newcastle city centre.

Virgin Money bought Northern Rock from the Government in 2011. As part of that deal, Virgin Money will pay a further £154.5 million to the Treasury.