The chief executive of Virgin Money has used a post-results slide in its stock market valuation to top up her shareholding in the challenger bank.
Sky News has learnt that Jayne-Anne Gadhia acquired approximately £100,000-worth of Virgin Money shares as they fell almost 9% during Tuesday’s trading session.
The purchase will be disclosed to the market later this week, according to a person close to the bank.
Ms Gadhia’s decision to buy more shares in the company reflects her confidence in its prospects despite the City apparently taking fright at a modest reduction in Virgin Money’s core equity tier-one capital ratio outlined in its half-year results.
The shares were sent tumbling to close at 279.6p, below the 283p level at which the bank’s initial public offering took place in November 2014.
Analysts at Bank of America Merrill Lynch described Virgin Money’s capital position as “strong” and said the selloff had been overdone.
“The post-results share price reaction of Virgin Money is surprising,” they said.
“It appears the market is worrying about a lower CET1 ratio and a slight dip in [net interest margin] guidance.
“We think concerns are overdone.”
Analysts at Goodbody took a different view, saying they were “negative on Virgin Money due to potential risks to income and credit card losses in the cards book”.
Virgin Money appeared to shrug off wider concerns about the UK’s economic prospects after Brexit, although it did acknowledge areas of growing weakness in some parts of the housing market.
Nevertheless, it painted an upbeat picture as it reported statutory pre-tax profits up 32% to £124m in the first half of the year.
Ms Gadhia also pointed to the discipline with which she said lending decisions were being made at the bank, with 8% less credit card lending than in the previous year.
“The momentum of the business demonstrates the strength of our strategy and the focus we have on serving our customers,” the bank’s chief executive insisted.
Relative to her basic pay, Ms Gadhia already owns a higher percentage of her company’s shares than most of her peers.
Prior to Tuesday’s purchase, she held nearly 2m shares in Virgin Money, equivalent to more than 770% of her salary, according to public disclosures.
The company requires executive directors to hold at least double their salary in the form of the bank’s shares.
A Virgin Money spokesman declined to comment.