Metro Bank Delivers Profitable October, Reaffirms 2025 Guidance Amid Strategic Portfolio Shift

November 12, 2024 08:52 AM PST | By Team Kalkine Media

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Metro Bank Delivers Profitable October, Reaffirms 2025 Guidance Amid Strategic Portfolio Shift — Image source: shutterstock

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Highlights

Profitable October: Metro Bank’s profitability aligns with 2025 targets of mid-to-upper single-digit RoTE.

Balance Sheet Repositioning: Completed sale of £2.5 billion in mortgage assets, refocusing on high-yielding commercial and SME loans.

Regulatory Update: FCA inquiry into Metro Bank’s historical financial crime systems now concluded.

Metro Bank Holdings PLC (LSE:MTRO LN) reported profitability on an underlying basis in October, achieving financial results in line with its 2025 guidance targets of a mid-to-upper single-digit return on tangible equity (RoTE). The bank’s net interest margin (NIM) rose to 2.48% in October, a notable 84 basis points increase since H1 2024, fulfilling its 2024 guidance and confirming the expected performance trajectory set in its half-year results.

As part of a broader strategic shift, Metro Bank has repositioned its balance sheet by focusing on higher-yielding assets, such as commercial, corporate, SME, and specialist mortgages. This initiative involved a significant transaction: the sale of a £2.5 billion mortgage portfolio, completed by 30 September 2024. Consequently, total net loans decreased by 22% since mid-year, standing at £9.1 billion at the end of Q3.

Customer deposits totaled £15.1 billion as of 30 September, down £1.4 billion from a February peak of approximately £16.5 billion. This change reflects the bank’s ongoing strategy to manage the cost of deposits effectively, enhancing its competitive positioning in a challenging financial landscape.

In a separate announcement, Metro Bank shared that the Financial Conduct Authority (FCA) has concluded its review into the bank’s historical financial crime systems and controls. This update removes a potential regulatory overhang and clears a path for the bank to focus on growth initiatives and strengthen investor confidence.

Metro Bank’s CEO expressed optimism regarding the bank's strategic realignment and commitment to long-term profitability.

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