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Metro Bank PLC on Wednesday said it was profitable in the first quarter of the year, and hailed March as its strongest month since the lender embarked on a turnaround.
Metro Bank shares traded 2.0% higher at 99.30 pence each in London on Wednesday morning.
Chief Executive Officer Daniel Frumkin said: ‘Metro Bank has delivered a second consecutive quarter of underlying profitability and March has been our strongest month of performance since the turnaround commenced. We continued to attract more personal and business accounts, demonstrating the strong appeal of our service-led, community-based model.’
Metro Bank did not provide a profit figure.
It said that total lending position amounted to £12.92 billion, down 1.4% from £13.10 billion at the end of 2022 but up 4.7% from £12.34 billion a year earlier.
Deposits were 2.6% lower at £15.60 billion at the end of March from £16.01 billion at the end of 2022 and down 5.5% from £16.50 a year earlier.
The fall in deposits from its year-end position was put down to ‘seasonal factors such as tax payments in January’, though this was slightly offset by net inflows in March.
‘The bank re-entered the fixed term deposit market during the quarter as guided at the full year. The core customer deposit base continues to be predominantly retail and [small and medium-sized enterprises] with low average balances, and a significant majority of customer deposits are protected by the Financial Services Compensation Scheme,’ Metro Bank added.
The Financial Services Compensation Scheme is a programme that protects UK customers if a financial services firm fails.
CEO Frumkin added: ‘Whilst we remain watchful of macroeconomic headwinds, we continue to optimise the business for improved risk-adjusted returns and are confident in our plan to become a sustainably profitable growth engine.’
Metro Bank’s second successive quarter of underlying profit is a sign of promise after the lender had faced a rocky period in recent years.
UK regulators found an accounting error in its loan book at the start of 2019. In January of that year, Metro Bank announced it had underestimated the risk on its commercial loans book and needed to raise capital to compensate for the shortfall and, as a result, was forced to issue an update highlighting the increased risk.
Metro Bank was demoted from the FTSE 250 index in September 2019. It has not returned since. The company had listed in 2016.
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