27th Feb 2025 11:38
(Alliance News) - Metro Bank Holdings PLC shares fell on Thursday after the retail bank reported a swing to loss in 2024, partly driven by a loss made on the sale of its mortgage portfolio.
Metro Bank shares were down 8.6% to 89.39 pence in London on Thursday morning, making it the third worst performer in the FTSE 250 index. The stock has multiplied from 34.65p over the past 12 months, however.
The London-based high-street lender said it swung to a pretax loss of GBP212.2 million in 2024 from a profit of GBP30.5 million in 2023. Total income for the year declined 38% to GBP405.3 million from GBP648.9 million.
Contributing to the swing to loss were a GBP101.6 million loss on the sale of its GBP2.5 billion mortgage portfolio, a GBP44.0 million write-off of intangible assets, GBP31.3 million in transformation costs, and GBP21.3 million in remediation costs, including a GBP16.7 million UK Financial Conduct Authority fine, Metro Bank said.
"The sale of the mortgage portfolio provides us with additional lending capacity to enable a further shift to high yielding assets in niche markets," the bank said, "supporting our strategic focus to become a specialist lender of choice".
Total operating expenses were up 4.3% to GBP610.3 million from GBP585.2 million.
Profit after tax, however, grew 44% to GBP42.5 million from GBP29.5 million last year, following the recognition of a GBP254.6 million deferred tax asset.
Diluted earnings per share for the year tumbled 53% to 6.3 pence from 13.4 pence a year prior.
The bank's CET1 capital ratio at December 31 was 12.5%, compared to 13.1% at the same time a year prior.
Its net interest margin for the year narrowed to 1.91% from 1.98%, with an exit margin of 2.65% at the year-end ahead of the bank's prior 2.50% guidance.
Net interest income grew 20% to 206.0 million from GBP171.9 million, "reflecting the continued transition towards higher yielding assets and a reduction in cost of deposits", Metro Bank said.
"It has been a transformational year for Metro Bank as we made substantial progress against our strategy, ending the period ahead of guidance, profitable, and with strong momentum going forward," said Chief Executive Officer Daniel Frumkin.
"We have successfully continued our pivot towards higher margin business in the form of corporate, commercial and SME lending and specialist mortgages, while also taking significant steps to reduce our costs and optimising our funding model. We have simplified and strengthened our balance sheet, and as a result, end the year with a robust capital position.
"Our network of stores helps us grow our target markets, with our specialist relationship banking colleagues driving positive outcomes for customers and communities across the UK. We are delivering on our strategy. Looking forward, we are confident that Metro Bank has a strong and compelling plan, differentiated model and clear path forward to further growth."
By Emily Parsons, Alliance News reporter
Comments and questions to [email protected]
Copyright 2025 Alliance News Ltd. All Rights Reserved.