In its results for the six months to June, Metro Bank said this saw its commercial loan book increase 16% on the second half of 2024 to £3.1bn.
The bank also had an £800m credit approved pipeline for the second half of 2025.
Its specialist mortgage book rose by 78% to £1.2bn, and in addition to the run-off of its prime mortgage book, Metro Bank’s retail mortgage portfolio amounted to £5.2bn.
The bank said retail mortgages were still the largest component of its lending book, accounting for 58% of loans.
The balances of Metro Bank’s target lending segments, including corporate, commercial and SME, and specialist mortgages, rose by 78% annually to £4.3bn.
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Combined with its legacy book in run-off, total loans amounted to £8.9bn.
Metro Bank reported a reduction in overall arrears rates, falling from 5.6% in H2 last year to 4.9% in H1 this year.
A swing to profit
The group had an underlying profit before tax of £45m, more than triple that of H2 2024 and compared to a loss of £27m over the first six months of last year. Metro Bank said this was due to improvements in net interest income and continued cost reduction.
Its underlying costs totalled £235m in H1, down from £255m the year before and £256m in the preceding six months.
Its net interest margin rose from 1.64% in the first half of 2024 to 2.87% this year, and Metro Bank said it was nearing the guidance of a net interest margin of around 3-3.25% by the end of 2025.
Its statutory profit before tax for H1 2025 was £43m, compared to a loss of £34m last year.
Metro Bank said it also expected to benefit from changes to the minimum requirement for own funds and eligible liabilities (MREL), mooted by the Bank of England and Prudential Regulation Authority (PRA), to help mid-sized mortgage lenders compete and expand.
The success of Metro Bank’s decisive actions
Daniel Frumkin, chief executive at Metro Bank, said: “Metro Bank’s strong performance in the first half of the year reflects the successful execution of our strategy and decisive actions we have taken. We trebled profits, doubled new lending to corporate, commercial and SME customers, meaningfully reduced operating costs and optimised funding to have the lowest cost of deposits of any UK high street bank.
“As we celebrate our 15-year anniversary, our unique relationship-led model, specialist lending expertise and expanding store network allows us to support customers, communities and help businesses to grow. This differentiates Metro Bank and fuels our growth.
“Looking ahead, we have a clear path to growth, delivering mid-to-upper-teens return on tangible equity (RoTE) by 2027, with cost of deposits and operating costs both already below levels needed to meet 2027 targets. We are confident in reconfirming guidance, as the actions we have already taken continue to build momentum to 2027 and beyond.”
