According to its half-year results, the lender said originations were offsetting the reduction in its legacy acquired portfolios.
Metro Bank said origination volumes came to £675m in the first half of the year, which compares to £510m in the half of the year ending 31 December 2021.
Residential mortgages remained the largest component of its lending book at 54 per cent, which is in line with its year-end figure.
The bank said lower-yielding mortgages were rolling off and it was shifting focus to specialist mortgages as part of a “balance sheet optimisation strategy”.
It added that mortgage application volumes in Q2 this year were 87 per cent higher that Q1 and 133 per cent more than Q4 last year.
The lender reported a statutory loss before tax of £60.2m, which is a softening from a £138.9m loss in the same period last year.
This included “one-off items” such as select asset write downs and remediation costs.
Daniel Frumkin, chief executive at Metro Bank, said: “We have delivered a strong first-half performance and I am encouraged by the continued momentum we are seeing across the bank.
“Initiatives we have put in place have helped us to improve net interest margin and lending yield, and drive record revenue growth. We have also maintained our cost discipline and improved our cost to income ratio, with the focus on generating greater earnings from our capital base. As a result, we have built a sustainable business and we now expect to reach monthly breakeven during Q1 2023.”
He said that this had been made possible by its “turnaround strategy” over the past two years.
“Collectively, we remain resolutely focused on continuing to execute our strategy and supporting our customers in the face of an increasingly complex macroeconomic environment,” Frumkin said.
