Metro Bank narrows losses

Source: Metro Bank

Turnaround plan successfully delivering momentum and sustainable growth, underpinning the path to profitability.

– Improving lending mix and maximising risk-adjusted returns on capital

– Margin expansion, NII growth and fee recovery driving revenue growth

– Enabling sustainable growth through strong cost control and improving operating jaws

– Targeted infrastructure development to improve resilience and protect the Bank

– Management remains focused on execution with clear steps to breakeven

Continued focus on customers, communities and colleagues, voted #1 high street bank for overall service, supported local communities with government-backed loans and successfully transitioned colleagues to a hybrid working model whilst maintaining the Bank’s strong culture

Underlying revenue increased by 17% to £397.9 million reflecting the shift towards higher yielding assets, lower cost of deposits and a recovery in customer activity.

Underlying costs of £546.8 million reflect management actions to control cost, deliver positive operating jaws and leverage the fixed cost base, underlying operating costs reduced 1% in the second half

Underlying loss before tax reduced by 37% to £171.3 million, a second half underlying loss of £61.3 million is down 44% on the first half, highlighting the momentum towards profitability

Statutory loss before tax of £245.1 million following settlement of the PRA investigation, provisioning for the FCA investigation, sanctions related remediation and non-recurring expense items that underpin the path to profitability such as restructuring and legacy fixed asset impairment

Daniel Frumkin, Chief Executive Officer at Metro Bank, said:

“Two years into the turnaround, our strategy is delivering meaningful results as we move towards profitability. In a changing macro-economic environment, we have accelerated the shift of our balance sheet, with improved yields and lower cost of deposits. This has had a material impact on underlying revenue, which improved 42% 1 when adjusting for the mortgage portfolio disposal. Encouragingly, the second half of the year delivered even stronger revenue and exit-NIM performances, providing ongoing momentum into 2022. There is still more to do, but our focus on delivering higher margins through unsecured and specialist mortgage lending, as well as tight cost control, is enabling transformational change. We remain committed to delivering on the strategy we set out, including supporting the communities in which we operate.”