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Metro lent £6.2bn of mortgages and reports first annual profit – results

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  • 21/02/2018
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Metro lent £6.2bn of mortgages and reports first annual profit – results
Metro Bank increased gross mortgage lending by £2.6bn in the full year to 31 December 2017 to £6.2bn and moved into profit for the first time since launch in 2010.

 

However, the bank’s share price saw a 7% share price fall this morning, with analysts concerned that margins are being sacrificed in the pursuit of growth.

The bank reported an underlying profit before tax of £20.8m ($29.1m) against a loss of £11.7m a year earlier.

The bank, founded by U.S businessman Vernon Hill opened its first store in Holborn in 2010 and is the only high street bank planning to bolster its 55-branch presence on the high street with 12 more openings this year.

The bank is known for being dog-friendly and having branches open 362 days a year, only closing its doors on Christmas Day, New Year’s Day and Easter Sunday.

Vernon Hill, chairman and founder at Metro Bank said: “At Metro Bank we are the fusion of digital and physical, combining face-to-face relationship banking with best in class technology creating record brand recognition of 89% in London. Our record lending, deposit and customer account growth proves that the Metro Bank model is the future of banking.”

Graham Spooner, investment research analyst at The Share Centre explained the fact their tier one ratio has fallen from 18.1% down to 15.3% means the bank is likely to have to capital raise, which is why the share price has fallen.

“There’s a long history of banks that have grown too quickly. Equally, there may be some consolidation among challenger banks over time as there are probably too many in this space.”

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