Metro Bank back in the black in September

2nd Nov 2022 08:50

(Sharecast News) - Metro Bank moved back into the black in September despite current economic conditions, thanks to better margins and the lender's focus on cost discipline.

For the third quarter, Metro Bank posted a 17 basis point increase in net interest margins in comparison to the prior three-month stretch to reach 1.98% with the exit NIM hitting 2.04%.

One year before, NIM stood 1.46%.

Commenting on the results, Metro Bank boss, Daniel Frumkin, highlighted the return to profitability on both an underlying and statutory basis and the "supportive" interest rate environment, together with a tight control on costs and risks.

"Whilst we remain watchful of economic conditions and continue to monitor our credit metrics closely, our book remains in good health," he added.

The loan-to-deposit ratio increased by three percentage points during the period, when compared to the prior quarter, reaching 78%, as loans grew 4% to £12.83bn.

Low-cost demand current and savings accounts continued to grow, with their share of the deposit base increasing to 96%, offset by a targeted reduction in higher-cost fixed term deposits, the lender said in a statement.

"There has been no deterioration in early warning indicators and no signs of stress or increased delinquency across the customer base," it added.

Metro Bank did incur in a £10m charge in the quarter linked to probability-weighted estimates of credit losses.

"[...] Going forward, the main driver of capital consumption is likely to be loan related RWA growth," Metro added.

"Although mindful of the macro environment, minimum regulatory capital requirements are expected to be met without needing to take any market-dependent balance sheet action."

As of 1018 GMT, shares of Metro Bank were rising by 14.01% to 83.0p.