According to its latest results, the lender said that its retail mortgage lending figures were flat compared to the end of last year as they were “constrained to replacement levels”.
Owner-occupied mortgages accounted for 72 per cent of its total portfolio, which is in line with the end of last year’s figure.
The report continued that around £779m of retail mortgages matured in the first half at an average yield of 2.28 per cent and a further £1.1bn is expected to mature in the second half of this year with an average yield of 2.38 per cent.
On the commercial lending side, gross loans and advances fell by 11 per cent year-on-year to £2.7bn, and contracted by seven per cent compared to the same period last year.
The firm attributed this to a “continued reduction” in its buy-to-let and real estate portfolios.
It added that government-backed lending was closed to new borrowers and continues to fall as loans as repaid.
Metro Bank added that overall arrears had remained “broadly stable and there have been no significant signs of increased stress”.
It said that non-performing loans had increased to 2.9 per cent, which is up from 2.6 per cent at the tail end of last year.
The company explained that this was “driven by maturation of the consumer portfolio and impacts of cost of living on the retail mortgages book, partly offset by successful BBLS claims and repayments of a number of large commercial exposures”.
Metro’s profits on the rise
Metro Bank said that its underlying profit before tax was £16.1m, which is up from a £2.6m loss in the first half of last year.
It said that this followed the completion of a “turnaround plan” to “return the bank to profitability”.
The bank added: “The balance sheet optimisation strategy has transformed the balance sheet to maximise return on regulatory capital whilst margins have been improved through disciplined cost control.
“Growth in profitability from here remains constrained as the bank assertively manages its capital position.”
Daniel Frumkin, chief executive officer at Metro Bank, said: “I am encouraged by the activity across the business. Our statutory profitability in H1, making this the third consecutive quarter of underlying profitability, demonstrates that our strategy is working.
“We continue to win new customers every day through our service-led franchise, at the same time as showing ongoing cost discipline and pursuing our targeted store expansion. Whilst we remain watchful of macro-economic headwinds, we have the expertise, capability and infrastructure in place to unlock our future growth potential.”
