24th Oct 2018 12:35
LONDON (Alliance News) - Midcap lender Metro Bank PLC on Wednesday reported an increase in profit in the third quarter and for the first nine months of the year on "strong" deposit growth and record lending growth.
Metro Bank's underlying pretax profit in the third quarter to September 30 more than doubled to GBP15.1 million from GBP7.2 million in the same period a year before.
The bank's total revenue in the recent quarter increased 34% to GBP105.0 million from GBP78.1 million in the third quarter of 2017. Metro Bank's third-quarter net interest income increased to GBP84.8 million from GBP64.3 million in the same period a year ago.
The bank said the competition in residential mortgages "continues to exert pressure" on asset yields which has "slowed margin progress". Metro Bank said it continues to lend into low-risk assets which it believes will limit the cost of risk in the long term.
The bank's overall net interest margin was 1.77% in the third quarter, down from 1.85% in the second quarter. Metro Bank's customer net interest margin in the quarter increased slightly to 2.21% from 2.20% the previous quarter.
Metro Bank's net loans & advances to customers increased 9.2% in the quarter to GBP13.12 billion from GBP12.01 billion at the end of the half-year stage.
Commercial loans were up 6.6% in the third quarter from the end of second quarter, as residential mortgages grew 10% in the same period.
The bank's deposits increased 7.8% to GBP14.81 billion from GBP13.74 billion at June 30.
In the same period, deposits from retail customers were up 6.1% and business & corporate deposits were up 9.4%.
Metro Bank increased its loan to deposit ratio to 89%, from 87% at the end of the previous quarter, driven by the bank's fourth successive quarter of lending growth exceeding GBP1 billion.
The bank's common equity tier one ratio was a "robust" 15.7% at the end of the quarter.
Metro Bank's statutory pretax profit for the nine months ended September multiplied to GBP34.4 million from GBP11.1 million the year before.
The retail bank's total revenue for the year-to-date increased 41% to GBP294.8 million from GBP209.2 million in the same period the previous year.
Metro Bank reported lending growth of 52% in the first nine months to GBP13.12 billion from GBP8.61 billion, with commercial loans up 43% to GBP4.17 billion and residential mortgages up 59% to GBP8.72 billion.
The challenger bank said the "recent competitive trends" in the mortgage market have persisted, despite the UK base rate increase in August.
Metro Bank increased its total deposits by 38% to GBP14.81 billion in the first nine months from GBP10.76 billion a year before. Deposits from retail customers increased 32% to GBP6.77 billion and corporate deposits increasing 42% to GBP8.05 billion.
The bank's demand current accounts increased deposits by 38% year-to-date to GBP4.50 billion from GBP3.27 billion a year ago, with demand savings accounts increasing deposits by 33% to GBP6.81 billion from GBP5.11 billion.
The challenger bank increased its number of accounts to 1.5 million, a 7.1% increase from a year before.
The company's assets increased 32% year-to-date to GBP20.57 billion from GBP14.57 billion.
For the nine months ended September, Metro Bank's net interest margin decreased 15 basis points to 1.82% from 1.97% a year ago. In the same period, the bank's customer net interest margin increased to 2.21% from 2.19%.
The bank said its "remains intensely focused" on its 2020 targets and the long term growth of the business.
Shares in Metro Bank were down 5.1% Wednesday in midday trading at 2,444.00 pence each.
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