Yahoo Finance Metro Bank closes in on first full-year profit as customer account numbers surge
Metro Bank, the high street lender seeking to challenge the dominant big five retail banks in the UK, is closing in on its first ever profit as more than a quarter of a million people opened accounts in 2016.
The challenger bank, which became the first new UK retail lender in more than a century when it opened in 2010, also saw significant growth in loans last year, it announced on Wednesday.
Pre-tax losses for 2016 narrowed to £17.2m from £56.8m a year earlier. In the last three months of the year, the bank made a £1.5m profit and said it was on target to turn its first full-year profit in 2017.
Metro Bank said it had not yet seen any negative impact from Britain’s decision to leave the European Union and confirmed it will open a further 10 to 12 branches in 2017, adding to the 41 it already has, mostly in the south-east of England.
The company has seen its share price rise 64 per cent since it floated on the London Stock Exchange last March.
Net interest income, a key measure of a bank’s profitability, almost doubled to £154.2m from £88.9m in 2015.
Deposits jumped 56 per cent to £8m, while lending grew 66 per cent to £5.9m. The company gained 260,000 new customer accounts, taking its total to 915,000.
American billionaire founder Vernon Hill – an acquaintance of Donald Trump – hopes Metro Bank's offering of seven-day-a-week opening times, same-day account opening and branches with free doggy biscuits and coin-counting machines for children will persuade customers to switch from big banks regularly criticised for poor customer service and tarnished by a string of high-profile scandals.
In a statement, Mr Hill said: “The response of the British public to Metro Bank has exceeded our expectations. Our goal is to create a legendary, emotional brand by creating fans who join our brand, remain loyal and bring their friends.
“I’m very proud of the bank’s success over the past 12 months, and my thanks go to our colleagues, investors and fans, who are Metro Bank. I am confident that this is just the beginning, the best is yet to come.”
The positive results come amid a flurry of annual earnings reports from the established high street banks. Lloyds on Wednesday announced its profits more than doubled in 2016 helped by less-than-expected payouts on the PPI scandal, while HSBC on Tuesday said that profits plunged 62 per cent for the year, which it blamed on “significant and largely unexpected economic and political events” as well as a series of one-off charges.
