26th Feb 2025 09:50
(Alliance News) - Metro Bank Holdings PLC on Wednesday confirmed the sale of its GBP584 million portfolio of unsecured personal loans, aligning with its strategy to refocus on higher-yielding specialist lending.
The London-based high street lender said the transaction is expected to generate an estimated GBP11 million gain upon completion. It also anticipates an improvement in its common equity tier 1 ratio by approximately 81 basis points and a boost to its total capital plus minimum requirement for own funds and eligible liabilities ratio by around 129 basis points.
Chief Executive Officer Daniel Frumkin said: "The sale of our unsecured personal loan book is in line with our strategy and positions Metro Bank strongly for future growth. Upon completion, the transaction is capital accretive and will allow us to further optimise our balance sheet as we strengthen our position as a specialist lender of choice."
Metro Bank said the deal would create additional lending capacity, enabling it to prioritise commercial, corporate, and small business lending, as well as specialist mortgages. The portfolio, which consists of performing loans with an average remaining term of 2.4 years and a weighted average rate of 5.3%, will be transferred to an undisclosed buyer.
The bank added that the transaction would have a "very limited impact" on its earnings, with its financial guidance remaining unchanged.
The move comes as Metro Bank continues efforts to reshape its operations. In late 2023, it secured a GBP925 million capital raise, which saw Colombian billionaire Jaime Gilinski Bacal become its majority shareholder. The bank has since taken steps to cut costs, including reducing its workforce by 1,000 jobs and scaling back its seven-day-a-week branch openings.
Metro Bank is set to report 2024 results on Thursday.
Metro Bank shares were up 0.1% at 93.89 pence in London on Wednesday morning.
By Eva Castanedo, Alliance News reporter
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