There have been plenty of dividend surprises out of S&P/ASX 200 Index (ASX: XJO) shares this year. Indeed, many have more than doubled their offerings in 2022. However, not many have grown their dividends by as much as ASX 200 bank share Virgin Money UK CDI (ASX: VUK).
The digital bank dropped its results for financial year 2022 yesterday, detailing a final dividend worth 0.075 pound sterling – or approximately 13 Aussie cents at today's exchange rate – per share.
That's particularly impressive given the bank paid out just 1.9 cents per share at the end of financial year 2021.
Additionally, it did not pay an interim dividend last financial year, meaning its latest full-year offering – coming in at around 17.4 cents on the back of the 4.4 cent dividend paid out in June – is a whopping 816% higher year on year. That's certainly nothing to scoff at.
Let's take a closer look at the mammoth dividend put on the table by ASX 200 bank share Virgin Money yesterday.
ASX 200 bank share posts monumental dividend growth
That's right, Virgin Money shares have blown most of the ASX 200 out of the water when it comes to dividend growth in 2022.
The company posted a $1 billion profit for financial year 2022 yesterday, marking a 43% year-on-year improvement. It also committed to paying out 30% in the form of dividends.
That's significant as it suspended dividends in financial year 2019 in light of payment protection insurance charges – a financial scandal that ramped up in the UK in the 2010s.
Fortunately, financial year 2021 saw Virgin Money return to paying dividends – though, it only offered a final dividend for that year.
Considering the 13 cents it will assumably payout in financial year 2022 (based on today's exchange rate) and its current share price – $2.88 – the ASX 200 bank share is trading with a 4.6% dividend yield. That's certainly nothing to scoff at.
However, it's worth noting ASX fans won't know the exact exchange rate at play until February 2023. Meaning, the stock's final offering might come in at more or less than 13 cents.
Virgin Money will trade ex-dividend on 9 February and its final dividend will begin hitting bank accounts from 15 March.
