Metro Bank deposits grew in the first quarter following a campaign to win back customers with high-interest rate savings accounts after the turmoil of 2023.
The high street lender revealed deposit levels increased by 4 per cent year-on-year to £16.2billion in the three months ending March after they declined in 2023 amid major concerns about Metro Bank’s future.
However, total lending fell by 9 per cent to £11.8billion as the group reoriented its balance sheet towards more profitable specialist mortgages and loans to small and medium-sized companies.
Results: High street lender Metro Bank revealed deposit levels increased by 4 per cent year-on-year to £16.2billion in the three months ending March
Last September, Metro was refused permission by the Bank of England’s Prudential Regulatory Authority to evaluate mortgage risks using its own internal models, which large banks can use to enhance profitability.
Many of the bank’s customers then began withdrawing cash in large volumes when reports emerged that Metro was trying to raise hundreds of millions of pounds to bolster its finances.
Although the business was profitable, its capital levels were only slightly above the minimum regulatory threshold, thereby posing a threat to its lending ability.
Metro eventually struck a £925million rescue deal, which included a £102million capital injection from Spaldy Investments, a firm run by Colombian billionaire Jaime Gilinski Bacal, who became the bank’s controlling shareholder.
Since then, Metro has axed around 1,000 jobs, equivalent to more than a fifth of its workforce, as part of efforts to save £80million in costs this year.
Alongside this, the company’s branches are no longer open on Sundays or bank holidays, a practice that had existed since the bank started trading.
All sites are now open on weekdays from to 9:30am and 5:30pm, but a majority are completely closed on the weekend, while 32 outlets only operate on Saturdays from 11am to 4pm.
Metro was the first British high street bank for over 150 years when it was founded in 2010 by Anthony Thomson and American Vernon Hill.
The latter quit as the company’s chairman in 2019, the same year Metro admitted to miscalculating the riskiness weighting on a large commercial loan portfolio.
Metro Bank Holdings shares were 1.9 per cent lower at 34.05p on early Tuesday afternoon, meaning they have plunged by over 94 per cent in the past five years.
Daniel Frumkin, chief executive of Metro Bank, said the business was ‘confident that financial results will continue to improve throughout 2024’ following its latest results.
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