Metro Bank profits up but margins shrink in third quarter
Metro Bank posted a jump in third-quarter underlying pre-tax profit on Wednesday as it saw record lending growth, but margins at the challenger bank shrank.
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For the three months to 30 September, underlying pre-tax profit was up 110% from the same period a year ago to £15.1m as revenue increased 34% to £105m.
Metro said it saw record lending growth of £4.5bn year-on-year, up 52% to £13.1bn, while lending in the quarter exceeded £1bn for the fourth successive quarter. In addition, the company surpassed 1.5m customer accounts, increasing the total number by 303,000 over the nine months to September and by 102,000 in the quarter.
But the bank's net interest margin declined to 1.77% from 1.94% the year before, as Metro said recent competitive trends in the mortgage market have persisted despite the base rate increase in August, as it has continued to focus on high quality growth of low risk assets.
Metro said it remains "intensely focused" on its 2020 targets and the long-term growth of the bank.
Chief executive officer Craig Donaldson said: "Our integrated, frictionless model - stores, online, mobile and phone - combined with superior service is a winning formula for our customers. We have continued to invest in our mobile services and have harnessed the power of Artificial Intelligence with the launch of our new Insights tool.
"Our commitment to service remains as strong as ever and it was fantastic to have that validated by the inaugural CMA survey in August. We were second for overall service quality in both personal and business banking, and the only provider to be ranked top five for qualifying business and personal services."